1.3.5 Marketing Strategy

Question 1

What does the product life cycle show?

Answer 1

It shows the sales of a product over time

Question 2

What are the 5 stages of the product life cycle?

Answer 2

. Development
. Introduction 
. Growth 
. Maturity 
. Decline

Question 3

What is the research and development stage?

Answer 3

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.

Question 4

What is R&D?

Answer 4

Research and development

Question 5

What is the introduction stage?

Answer 5

. 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

Question 6

what is the growth stage?

Answer 6

. 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

Question 7

What is the maturity stage?

Answer 7

. 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

Question 8

What is the decline stage?

Answer 8

. 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 If sales continue falling product is withdrawn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)

Question 9

What are extension strategies?

Answer 9

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

Question 10

Examples of extension strategies?

Answer 10

. Product development

. Promotion

Question 11

A different term for product portfolio?

Answer 11

Product mix

Question 12

What is a product line?

Answer 12

Related products with similar characteristics, uses or target customers

Question 13

Example of a product line?

Answer 13

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

Question 14

What is a product portfolio?

Answer 14

A combination of product lines that a business produces

Question 15

Example of product portfolio?

Answer 15

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

Question 16

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

Answer 16

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

Question 17

What is the Boston matrix?

Answer 17

Compares market growth with market share

Question 18

What are the four sections of the Boston matrix?

Answer 18

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

Question 19

What are questions marks in the Boston matrix?

Answer 19

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

Question 20

What are cash cows in the Boston matrix?

Answer 20

. 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

Question 21

What are stars in the Boston matrix?

Answer 21

. 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

Question 22

What are dogs in the Boston matrix?

Answer 22

. 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

Question 23

What does the Boston matrix show?

Answer 23

Shows where a businesses products are positioned in the market

Question 24

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

Answer 24

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

Question 25

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

Answer 25

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

Question 26

Who does mass marketing need to appeal to?

Answer 26

To appeal to a wide audience instead of individual market segments

Question 27

Features in a mass marketing strategy?

Answer 27

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

Question 28

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

Answer 28

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

Question 29

Features of a niche marketing strategy?

Answer 29

. 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

Question 30

What is B2B Marketing?

Answer 30

The sale of one businesses product to another business

Question 31

What is B2C Marketing?

Answer 31

The sale of a businesses product to a customer

Question 32

Features of B2B Marketing?

Answer 32

. 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

Question 33

Why is customer loyalty important for repeated purchases?

Answer 33

. 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

Question 34

How do businesses invest in the customer? And example

Answer 34

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

Question 35

What do loyalty cards do?

Answer 35

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

Question 36

In what markets are loyalty cards useful?

Answer 36

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

Question 37

Example of a loyalty cards scheme?

Answer 37

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

Question 38

What are saver schemes?

Answer 38

Customers collect points based on how much they spend

Question 39

Example of saver scheme?

Answer 39

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