1.3.5 Marketing Strategy

Question 1

Marketing strategy definition

Answer 1

a plan for future marketing activity balancing company objectives, available resources and market opportunities, implemented through the marketing mix.

Question 2

Product life cycle definition

Answer 2

The sales of a product over its lifetime

Question 3

5 stages

Answer 3

Development 
Introduction 
Growth 
Maturity/saturation 
Decline

Question 4

Extension strategies definition

Answer 4

Ways to prolong the life of a product in the medium to long term. Two main variables: the product itself and the way it is promoted.

Question 5

New product development definition

Answer 5

Turning new ideas into products or services ready for launch

Question 6

+&- of product life cycle

Answer 6

+ plan what they do with the marketing strategy depending on the stage the products are in
+ as it is based on actual sales data it is easier to decide what to do next
- it is only based on one product at a time so very time consuming for business with a large product portfolio
- these could be fluctuations in sales data due to production problems, seasonal issues and time lag

Question 7

Extension strategies

Answer 7

Product adjustment
- making improvements (banks, new accounts or computers)
- updating (car industry)
- repackaging (soft drinks, baked beans or music industry- new cover)
- extending the product range (crisps- new flavours)
Promotion
- find new uses for products (Botox- originally used to correct eyes that moved in deferent directions)
- new markets (local to regional markets or national to international markets)
- target a new segment of the market

Question 8

“Managing the product portfolio”

Answer 8

Sales of products eventually decline so a well-organised business will attempt to phase out old products and introduce new ones

Question 9

What is the Boston matrix used for

Answer 9

Businesses use the Boston matrix to examine the existing position of a businesses products in relation to market share and growth

Question 10

Market share definition

Answer 10

How much of the market is controlled by one business

Question 11

Market growth definition

Answer 11

How much is the overall market growing

Question 12

The Boston matrix shows:

Answer 12

1. The market share of each of the businesses products

2. The rate of growth of the markets in which they operate

Question 13

The Boston matrix diagram

Answer 13

|————- market share ————— 
Market 
Growth    
            | 
            | 
            | 
            |
            | 
            | 
            |

Question 14

Business to business

Answer 14

• Companies that create products and services geared towards other businesses
• they offer the things other businesses need to operate e.g. raw materials