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A Level Business > 1.3.5 Marketing Strategy > Flashcards

1.3.5 Marketing Strategy Flashcards

1
Q

What does the product life cycle show?

A

It shows the sales of a product over time

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2
Q

What are the 5 stages of the product life cycle?

A 
. Development
. Introduction 
. Growth 
. Maturity 
. Decline
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3
Q

What is the research and development stage?

A

The R&D develop the product and the marketing department markets it. However costs are high with a high failure rate due to not enough demand.

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4
Q

What is R&D?

A

Research and development

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5
Q

What is the introduction stage?

A

. The product is either launched in one or several markets. Businesess have to make their product appeal to customers as much as possible leading to the product being promoted a lot.
. penetration pricing is used to increase sales

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6
Q

what is the growth stage?

A

. Sales grow fast leading to new and repeat customers
. competitors may be attracted to this market so promotion is used to differentiate them
. product is improved and developed and it may be targeted at a different market segment
. rising sales encourage outlets to stock product

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7
Q

What is the maturity stage?

A

. sales are at a peak and profitability increases
. At saturation sales may begin to drop
. Not many new customers
. Fierce competition in the market so sales may drop

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8
Q

What is the decline stage?

A

. The product does not appeal to customers anymore
. Product may stay profitable if promotional costs are low
. If sales continue falling product is withdrawn
. Decline stage is not inevitable (good products with good promotion and branding sell for decades)

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9
Q

What are extension strategies?

A

Used to improve sales of products that are starting to decline (keeping the product going strong for longer)

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10
Q

Examples of extension strategies?

A

. Product development

. Promotion

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11
Q

A different term for product portfolio?

A

Product mix

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12
Q

What is a product line?

A

Related products with similar characteristics, uses or target customers

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13
Q

Example of a product line?

A

The Nestle Kit Kat product line consists of Kit Kat 2 finger, 4 finger, KitKat chunky…

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14
Q

What is a product portfolio?

A

A combination of product lines that a business produces

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15
Q

Example of product portfolio?

A

Nestles product portfolio includes product lines like Kit Kat, Nespresso, shredded wheat…

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16
Q

Why does a business aim to have a variety of different products (product portfolio) at different stages of the product life cycle?

A

If one product fails the business should be able to depend on the others

17
Q

What is the Boston matrix?

A

Compares market growth with market share

18
Q

What are the four sections of the Boston matrix?

A

. Question marks (problem child)
. Dogs
. Cash cows
. Stars

19
Q

What are questions marks in the Boston matrix?

A

. All new products are questions marks
. Products with low market share and high market growth
. needs heavy marketing and could succeed or fail

20
Q

What are cash cows in the Boston matrix?

A

. high market share but low market growth
. in their maturity phase
. produced in high volumes so costs are low
. bring in a lot of money

21
Q

What are stars in the Boston matrix?

A

. high market share with high market growth
. future cash cows
. in profitable growth phase
. spend lots of money on promoting to keep market share
. money spent to increase capacity to keep up with demand

22
Q

What are dogs in the Boston matrix?

A

. low market share with low market growth
. lost cause
. if it’s still profitable the business will harvest profit in short term
. if it’s not profitable it can be sold off

23
Q

What does the Boston matrix show?

A

Shows where a businesses products are positioned in the market

24
Q

What decisions depend on the products position in the Boston matrix?

A

Marketing decisions. E.g a business uses money from its cash cows to invest into question marks

25
Q

What can’t the Boston matrix predict with a product?

A

Cant exactly product what will happen with a product. a products profit may one different to what the matrix suggests. E.g a dog has falling sales but stays profitable

26
Q

Who does mass marketing need to appeal to?

A

To appeal to a wide audience instead of individual market segments

27
Q

Features in a mass marketing strategy?

A

. Needs to have mass appeal
. Should clearly show any USPs of the product
. Have to promote their products a certain way to stay competitive

28
Q

Examples of businesses promoting in a certain way to stay competitive?

A

. Expensive ad campaigns
. Sponsorship and product endorsement deals
. Promotional activities like % discounts
. customer loyalty cards and saver schemes can get repeat customers

29
Q

Features of a niche marketing strategy?

A

. More emphasis on creating a product that is differentiated or unique
. More specialised
. The business needs to understand the needs, values and aspirations of the consumer
. Need to find cost effective ways of raising awareness due to they tend to have low budgets
. Concentrate on building a reputation and building customer loyalty

30
Q

What is B2B Marketing?

A

The sale of one businesses product to another business

31
Q

What is B2C Marketing?

A

The sale of a businesses product to a customer

32
Q

Features of B2B Marketing?

A

. Informative
. Advertised in trade journals and trade shows
. B2B customers have no emotional connection to the product
. Customers are concerned about savings of potential revenue
. Effective customer service
. Build strong relationship between the 2 businesses
. Focuses on the needs of the consumer

33
Q

Why is customer loyalty important for repeated purchases?

A

. Strong customer service builds a strong brand and customer loyalty
. Sales people make the customers feel happy so they are more likely to make a sale
. After sales service makes the customer feel valued so they may return to buy again

34
Q

How do businesses invest in the customer? And example

A

. Strong customer service
. Ensuring the customer is good and feels valued
. E.g A luxury waiting room with complementary drinks

35
Q

What do loyalty cards do?

A

They help tie a customer in with a particular service provider or retailer

36
Q

In what markets are loyalty cards useful?

A

Useful when there are many substitutes or when the product is purchased regularly

37
Q

Example of a loyalty cards scheme?

A

Coffee shops give out loyalty cards where the customer collects a stamp on every time they buy a drink. A certain number of stamps =a free drink

38
Q

What are saver schemes?

A

Customers collect points based on how much they spend

39
Q

Example of saver scheme?

A

Tesco club card where the points give customers vouchers for money off their next shop (and also vouchers for other businesses)

A Level Business (12 decks)

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