Unit 13 - Marketing Strategy Flashcards
Def: Boston matrix
A 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within a market
Def: extension strategies
Methods used to prolong the life of a product
Def: marketing strategies
A set of plans that aims to achieve a specific market objective
Def: product lines
A group of products that are very similar to
Def: product portfolio
The collection of products a business is currently marketing
The product life cycle stages
Product development - 0 - research and design so there are costs
Introduction - goes up slowly - product is launched, sales slow, costs of promotion
Growth - grow rapidly - as product established and consumers are aware of it, becomes profitable
Maturity and saturation - growth of sales level off - more competitors enter the market
Decline - sales decline - change in consumer taste, new tech, new products
Extension strategies-
Product adjustment 5
Promotion 3
Updates
Improvements
Extend product range
Seem like products been modified Eg cans and bottles
New uses
Expand region that it sells in
Investment in sizable advertising campaign
Persuade to use product more
Boston matrix is made up of
Y axis - market growth rate (%)
X axis - relative market share
Boston matrix -
High market growth rate - high relative market share
Low market growth rate - low relative market share
High market growth rate - low relative market share
Low market growth rate - high relative market share
Stars
Dogs
Question mark
Cash cow
Boston matrix-
Stars
Dogs
Question marks
Cash cow
High market growth rate - high relative market share
Low market growth rate - low relative market share
High market growth rate - low relative market share
Low market growth rate - high relative market share
Boston matrix- star
Valuable
Profitable
Need to invest in production
So net cash flow may be near 0
Boston matrix- dogs
Poor prospects for profit
Positive cash flow as less need to invest in production
Boston matrix- question mark
Unclear what can be done
If weak unlikely profitable but as its a growing market it could become a star
Net cash flow likely to be 0 or negative
Boston matrix- cash cow
Profitable
Little chance of increased profits in future
Little need for investment
Strong positive cash flow
Appropriate decisions for-
Stars
Cash cows
Question marks
Dogs
- build the brand
- milk the cash, spend on promotion and development
- build the brand, harvest the product by raising prices and cutting promotion for high profit or divest itself as not making a profit
- may be divested or harvested
