1.3.5 Marketing strategy

• • The product life cycle describes the different stages a product goes through from its conception to its eventual decline in sales
  •  five stages in the product life cycle: development, introduction, growth, maturity, and decline
• Development stage of product and its implications

  designing and developing product

  high costs for research, product testing

  so...

  cash flow is negative so marketing focus on creating awareness and generating interest in product
• Introduction stage and its implications

  slow sales growth

  cash flow still negative so marketing efforts maintenance, creating awareness and generating interest
• Growth stage and its implications

  rapid sales growth

  focus shift to market share and increasing production to meet demand

  so..

  positive cash flow

  differentiate product from competitors and build brand loyalty
• maturity stage and its implications

  slowing sales growth

  maintain market share and increase profitability through marketing

  cutting costs and finding new markers
• decline stage and its implications


  managing products decline and reducing costs

  so...

  negative cash flow

  discount product , reduce price to clear inventory and find new uses
• • Extension strategies refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle
  • These strategies are designed to boost sales and maintain profitability for a product that has reached the decline stage of its life cycle


  businesses can appeal to customers
• Product-related extension strategies

  changing or modifying the product to make it more appealing to customers and extend its life cycle

  product improvements - Samsung new features

  line extensions - diet coke

  repositioning market focus
• Promotion-related extension strategies

  changing the marketing and promotion of the product to extend its life cycle

  changes to advertising

  price promotions - cyber Monday

  sales promotions
• • The Boston Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product


  cash cow

  problem child/question mark

  star

  dog
• Cash cows

  high market share, low market growth rate

  generate high cash flow but low growth
• Problem child/question mark

  low market share, high market growth

  negative cash flow, businesses usually invest in problem child products to increase their market share and turn them into stars
• Star

  high market share, high market growth

  positive cash flow, brand recognition

  maximise potentials
• Dog

  low market share and market growth

  little revenue , divest
• Mass markets marketing strategies appropriation

  focus on building brand awareness

  simple messages on TV

  create strong brand identity
• Niche markets marketing strategies appropriation

  targeting specific segment

  building relationships

  targeted

  technical detailed info
• b2b marketing

  building relationships with other businesses and demonstrating how your product can help them be more successful

  advertising campaigns which showcase value of product/service

  technical messages focus on features and benefits, relevant to other businesses
• B2c marketing

  building brand loyalty and creating a positive customer experience

  social media and emotional marketing to appeal customers

  emotional and focus on lifestyle benefits of using product
• • Developing customer loyalty helps businesses to grow and be successful in the long term
  • Customer loyalty drives repeat purchases which helps the firm to reduce marketing costs when launching new products
  • Three commonly used methods of building customer loyalty include providing excellent customer service, offering loyalty cards, and offering saver schemes
• Consumer behaviour - how can businesses develop customer loyalty?

  positive customer service

  loyalty schemes - sephora

  saving schemes - sainsburys