Unit 8 Flashcards
what are the four components of Ansoff’s Matrix?
-Market penetration
-Product development
-Market development
-Diversification
What’s market penetration?
Sell more share of an existing product to an existing market
What are the approaches and dangers of market penetration?
Approaches
-Gain share from competitors
-Encourage customers to buy/consume more
-Changes to marketing mix
-Extension strategies
Dangers
-Competitors reactions
-Relatively short term only
-Market may be saturated
What’s market development?
Attracting new customers to buy existing products
What are the approaches and dangers of market development?
Approaches
-Enter a new International market
change promotional tactics
-New distribution channels
Dangers
-Product may not be accepted
-Business may not understand the new market
-Alienation of current customers
What’s product development?
Selling new customers new and better products
What are the approaches and dangers of product development?
Approaches
-Launch substantially improved version of existing product
-Introduce complementary product
-New product innovations
Dangers
-Risk of cannibalisation
-May shorten product life cycle of other products
-Damage to brand
What’s diversification?
Selling new product to new markets
What are the approaches and dangers of diversification?
Approaches
-R&D into new products and market research into new markets
-Acquisition of other businesses
Dangers
-Relies on heavy investment
-Cultural differences may exist
-Brand name may be diluted
What is strategic positioning?
Where a business wants to be in the market relative to other businesses
What models analyse strategic positioning?
-Bowman’s strategic clock
-Porter’s low cost, differentiation and focus strategies
What are 4 the components of Porter’s generic strategy?
-Cost leadership (Low cost, mass market)
-Differentiation (High differentiation, mass market)
-Focused cost leadership (lowest cost, niche market)
-Focused differentiation (highest differentiation, niche market)
What’s needed for low cost to be successful?
Price is key element in the marketing mix
Both operational and financial
What’s required for differentiation to be successful?
-Product-has to appear better than the competition
-Promotion-create desire, exclusivity, brand loyalty
-Operational objectives focus o R&D
What are the 8 components of Bowman’s strategic clock
1.Low price, low added value
2.Low price
3.Hybrid
4.Differentiation
5.Focused differentiation
6.Risky, high margins
7.Monopoly pricing
8.loss of market share
