Marketing strategy

• Product life cycle 


  Shows the sales of a product over time
• What are the stages of the product life cycle in order?

  • Development
  • Introduction
  • Growth
  • Maturity
  • Decline
• Development 


  • Research of product is done
  • Costs high + no sales to cover costs yet
• Introduction

  • Product is launched
  • Promotion occurs to build sales—> must ensure there’s enough resources to meet demand promotion creates
  • Initial price may be high to cover costs of business (skimming)
  • Initial price may be low to encourage sales (penetration)
• Growth 


  • Sales grow fast (new customers + existing)
  • Competitors may enter market ( promotion shows differences between competitors)
  • Product often improved/developed
• Maturity


  • Sakes reach peak + profitability increases as fixed costs of development have been paid for
  • Saturation point so sales may drop so business may reduce price to stimulate demand
• Decline


  • Product doesn’t appeal to consumers so sales fall rapidly + profit decreases
  • If sales fall too much, product is withdrawn or sold to another business
• Extension strategy


  Strategy that keeps a product going stronger for longer
• What are the two types of extension strategies?

  1: Product development (involves improving, reformulating or redesigning a product eg, changing packaging)

  2. Promotion (can change the way it promotes a product eg, new ad campaign)
• What is a product portfolio?

  A collection of products or services offered by a company Eg, KitKat —> 2 finger, 4 finger, chunky
• Boston Matrix 


  A model of product portfolio analysis —> compares market growth + market share || size of circle represents the sales revenue of the product
• Question marks 


  • Low market share + high market growth
  • Not profitable yet so can succeed or fail
  • Need heavy marketing eg, brand building + harvesting
• Cash cows 


  • High market share + low market growth
  • In maturity phase, product already promoted + produced in high volumes so costs low
• Stars


  • High market share + high market growth In maturity
  • Profitable growth phase + have most potential
  • Future cash cows
• Dogs


  • Low market share + low market growth
  • Still profitable but no longer growing
  • Business will gain profit in short-term but if product is no longer making profit it can be sold off
• What are the advantages of the Boston Matrix?

  • Valuable way of showing where a businesses products are positioned in the market
  • Marketing decisions will depend on its position
• What are the disadvantages of the Boston Matrix?

  • Cant predict what will exactly happen to a product ( product profit may be different from what the matrix suggests )
• Mass marketing strategy 


  Needs to appeal to the whole market instead of individual market segments
• What are the different marketing strategies for a mass market?

  • Advertising campaigns to maintain brand awareness
  • Sponsorships + brand/product endorsement
  • Promotional activities at the point of sale eg, BOGOF
  • Being price competitive
  • Customer loyalty cards + saver schemes to increase customer loyalty
• What are the different marketing strategies for a niche market?

  • Concentrates on building reputation + establishing customer loyalty due to smaller market size
  • Must find cost effective ways of advertising
• B2B


  Business to business marketing —> the sale of one businesses products to another business (focuses on being informative)
• B2C


  Business to consumer marketing —> the sale of a businesses products to a consumer (focuses on an emotional component)
• What marketing strategies would a B2B use?

  • Likely to advertise through trade journals + shows
  • Interested in quality of product but more concerned with savings and potential revenue as there’s no emotional connection
  • Strong emphasis on building long-term relationships between businesses having highly effective customer service
• What marketing strategies would a B2C use?

  • Focus on having a strong brand identity
  • Develop compelling value propositions
• How can businesses develop customer loyalty?

  • Strong customer service before + after sales —> creates good relationship with consumer
  • After sale service eg, helping with problems after purchasing a product so they’re likely to return
  • Loyalty cards + schemes especially useful for product bought monthly/daily