3.3

• Dog

  • Low m share low m growth
  • sales fall
  • use up profit to keep
  • in fail or decline phase
  • no potential
  • should phase out or sell off
• Cash cow

  • High m share low m growth
  • Use profit to find new products
  • high sales w little investment
  • mature stage, large cash flow
  • lower investment to maximise profit
• rising star

  • high m share high m growth
  • excellent product
  • needs constant ads
  • positive cash flow
  • should invest to sustain growth
  • maintain/ build market share
  • should repel challenge
  • creates barriers to entry
• Problem child

  • Low m share high m growth
  • high investment to develop + promote
  • big sales potential
  • Neg cash flow
  • has potential
  • should be very selective + invest to increase market share
  • should build competitive advantage
• Boston matrix

  1. Problemchild
  2. risingstar
  3. Dog
  4. cashcow

  method of analysing market position of existing product

  
• product life cycle

  1. development
  2. introduction
  3. Growth
  4. Maturity
  5. decline

  
• Stages of product development

  • Idea generation
  • screening
  • Prototype
  • Testing
  • Launch
• Influences on product development

  • Entrepreneurial skills of owner
  • competition
  • Technological advances
• product challenges (marketing mix)

  • Find USP
  • Differentiate product
  • new product development
• marketing mix

  • product
  • process
  • place
  • price
  • promotion
  • physical environment
  • people
• market mapping

  • businesses can display perceptions of customers
  • compare variable regarding products + consumers
  • analyse buying habits
  • identify market gaps

  
• niche marketing

  • focus on small market that competitors aren’t worried about, a specific segment
  • +focus on individual customer needs
  • +high return on marketing expenditure
  • +low competition
  • +charge premium price
  • -no economies of scale
  • -conditions rapidly change
• Mass marketing

  • A firm aims 1 product at all/most segments in a market
  • +high sales
  • +economies of scale
  • -competitive
  • -diseconomies of scale
• Undifferentiated marketing

  firm to total pop, scattergun approach
• Segmentation variables

  • demographic- who
  • geographic- where
  • psychograpic- how they think
• benefits of segmentation

  • precisely defines market
  • can devise effective strategy or tactic
  • analyse competitors
  • respond to segment changes
  • easy to allocate resources
  • identify gaps in market
• market


  actual and potential buyers of product
• market segmentation

  dividing market into groups of similar customers
• market segment

  subgroup of people with similarities for more efficient buyer/seller relationships
• target market

  subgroup of people presenting the best opportunity for marketing
• YED

  Change in demand in response to income

  >1 = elastic Increased income = Increased demand , luxury good

  0-1 Inelastic Increased income = small change in demand, Necessity

  Negative Inverse relationship Increased income = decreased demand, Inferior good
• how to make product more inelastic

  • differentiate product
  • take over competitor to remove choice
  • change price over short period so customers don’t notice
• why price elastic

  • easy to switch over time
  • low brand loyalty
  • non essential
  • high price as proportion of income
  • many substitutes
• PED

  • Change in demand in response to price
  • >1 = inelastic, responds to change in price with fall in demand
  • 0-1 = inelastic, don’t react to price change
• Confidence interval

  • Assess reliability of sampled data
  • Only cross-section, so not accurate reflection
  • Best + worse case scenario

  
• extrapolation


  Using past data to predict sales by identifying past trends

  
• correlation

  Relationship between two variables

  A positive correlation

  B negative correlation

  C no correlation

  
• stratified sampling

  • Sub group identified from frequency and population then participant randomly selected from subgroup -> % sample represent % total population.
  • + representative
  • -Time consuming
• quota sampling

  Select number from each segment of population

  + quick and cheap

  -Can be very biased
• Random sampling

  Anyone in target population has equal chance of selection

  + effective

  -Time consuming
• Types of sampling

  • Random
  • quota
  • stratified
• qualitative data

  • Focus on consumer feelings about service
  • Groups of 8 to 10 people depth interviews
  • + answers why?
  • + face-to-face non verbal signs
  • -Small numbers
  • -one dominant member may prevent all voices from being heard
• quantitative data

  • Numerically based
  • surveys and questionnaires
  • + decisions made confidently based on numbers
  • + a large sample statistically robust
  • -A small sample, maybe biased
  • -Expensive
  • -Time consuming
• secondary research

  Collected from another organisation ( census data geo demographic data)

  + fast

  + cheap

  -lack specifity

  -not confidential
• primary research

  New research collected yourself

  + company specific

  + can control spending

  +Confidential

  -Expensive

  — time consuming
• Market research process

  • Define problem
  • decide how to collect data
  • select sample
  • choose analysis techniques
  • decide budget/ time frame
• marketing cycle

  • corporate objective
  • marketing objective
  • market analysis
  • marketing strategy
  • marketing tactics
  • review and evaluate
• Growth 


  (change / original) X 100
• market size

  Original X 1 + % change

  value of total sales by all firms in 1 market
• market share

  sales of product/ total sales in market X 100

  % of total sales held by one firm