Marketing Strategy (1.3.5) Flashcards
(27 cards)
What are Marketing Strategies?
Business’s overall game plan for reaching prospective consumers and turning them into customers of their products or services.
What are Marketing Strategies all about?
Creating Customer Loyalty
What is the Product Life Cycle?
Its the life span of a product and shows the different stages of the products life.
What are the 5 Stages to the Product Life Cycle?
(R+D), Introduction, Growth, Maturity, Decline
What is the Research and Development stage of the product life cycle? What is cash flow like at this stage + marketing strategy?
Focus is on designing and developing the product. Business usually incurs high costs from R+D, market research and product testing.
Cash Flow is usually negative due to company heavily investing in product without gaining any revenue.
During this stage the marketing strategy focuses on creating awareness and generating interest in the product.
What is the Introduction stage of the product life cycle? What is cash flow like at this stage + marketing strategy?
Begins when product is launched. Slow sales growth as product is still new and unknown to most customers.
Cash Flow is usually negative as business has high promotion costs.
Marketing efforts focuses on creating awareness an generating interest in the product.
What is the Growth stage of the product life cycle? What is cash flow like at this stage + marketing strategy?
PLC enters stage where sales begin to increase rapidly. Business focus shifts to building MS and increasing production to meet growing demand.
Cash Flow usually turns positive as SR increases and costs spread our over larger volume of production.
Marketing strategy is to differentiate product from competitors and build brand loyalty.
What is the Maturity stage of the product life cycle? What is cash flow like at this stage + marketing strategy?
Slowing sales growth as product reaches its peak.
Cash Flow usually positive as SR continues to come in and costs are reduced through E of S.
Marketing Strategy aims to maintain MS and increase profitability by cutting costs and finding new markets.
What is the Decline stage of the product life cycle? What is cash flow like at this stage + marketing strategy?
Starts when sales being to decline as product become obsolete ( out of date) or is replaced by newer products. Business shifts focus to managing product’s decline and reducing costs.
Cash Flow usually turns negative as SR declines and costs increase.
Marketing strategy’s involve discounting product, reducing its price to clear inventory or finding new uses for the product.
What are extension strategies of the Product Life Cycle?
They are used by businesses to extend the life span of a product or service beyond its natural life cycle. Strategies designed to boost sales and maintain profitability once a product has reached the decline stage.
What are the two different types of extension strategies?
- Product-related extension strategies
- Promotion-related extension strategies
What are Product-related extension strategies?
Involves changing or modifying the product to make it more appealing to customers and extend its life cycle.
What are different examples of Product-related extension strategies?
This can be done with:
1. Product improvements- New version with upgraded features
2. Line extensions- Adding new products to existing range
3. Repositioning- Changing how product is seen by customers to make more appealing or reach a diff target market
What are Promotion-related extension strategies?
Involves changing the marketing and promotion of the product to extend its life cycle.
What are different examples of Promotion-related extension strategies?
This can be done with:
1. Changes to advertising
2. Price Promotions- Discounted prices to keep product popular for longer
3. Sales Promotions- Loyalty programs where customers can earn free things
Examples of extension strategies of the Product Life Cycle?
-Lowering price
-Re-Branding
-Updated Features
-New Promotion
-New Target Market
-New uses
What is the Boston Matrix?
Portfolio of Products can be analyzed using the Boston Group consulting Matrix. This categories the products into 4 different areas based on Market Growth and Share.
What are the four categories of the Boston Matrix? What are they measured against?
Question Marks, Stars, Cash Cows, and Dogs
Measured against Market Share and Market Growth rate
What are the Question Marks in the Boston Matrix?
Introduction phase and it is products with low market share and high opportunity for growth. Have potential but may need help to grow.
What are the stars in the Boston Matrix?
The Stars are the Growth Phase and its when the products have high growth and are strong compared to competition. They need heavy investment to sustain growth.
What are the Cash Cows in the Boston Matrix?
Low Growth products with high market share. Mature, successful products with relatively little need for investment.
What are the Dogs in the Boston Matrix?
The Dogs represent the Products that have a low market share and are unattractive. They are in Low-growth Markets and may not generate enough to break-even so aren’t really worth investing in. They are the Decline Stage as Product goes out of trend.
Why is it important to have products at all different stages of the life cycle?
This is because as one declines you will have one in the growth stage so you always have a successful one as it rotates and you aren’t losing out on anything.
What are mass and niche markets?
Mass Markets- Large number of customers who have similar needs and wants
Niche Markets- Smaller groups of customers with specific needs and wants
