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Marketing definition
Marketing is the management process of identifying, anticipating and satisfying consumer demands for profit.
Marketing strategy definition
Marketing strategy is the methods used by a business to achieve their marketing objective.
What are the stages of a product life cycle?
R&D
Introduction
Growth
Maturity
Decline
What happens in the product development phase?
Consists of R&D
Market research
Product is design and market is being researched.
Cashflow is tight
Product is not making any revenue.
What happens in the introduction phase?
High costs in R&D and product has to be tested.
Sales are low as customers may not be aware of the product
Informative & Persuasive marketing
What happens in the growth phase?
Rapid growth in sales.
Customers are aware of product
High demand
Advertise product to take advantage of high demand
High competition
What happens in the maturity phase?
Intense competition
Sales are high
Products have to be discounted for high sales
Market is starting to be saturated
What happens in the decline phase?
Limited production
Profits and sales have fallen
Heavily discounted sales
Replaced with new products
What are ways to extend product life?
Updating packaging
Adding more or different features
Changing target market
Advertising
Price reduction
Boston Matrix definition
Boston matrix is a marketing planning tool which helps plan for a balanced product portfolio.
What does the Boston matrix help with?
It looks at two areas: Market share and market growth, used to asses new and existing products.
It helps marketing managers work out how much to spend on each product.
Product portfolio definition
Product portfolio is the collection of all products and services that is offered by the company.
What are star products?
High market sharre
High growth market
Need to maintain their current marketing spend to keep sales high.
Stars → Cash Cows in time
What are Cash cow products?
High market share
Low market growth
Good sellers and need no investments
Need to be “milked” for cash
Cash cows → Dogs
What are question mark products?
Low market share
High growth market
Question mark → Stars is managed properly
Need lots of investment in promotion/ marketing.
What are dog products?
Low market share
Low growth market
No investment needed
Decline phase of life cycle
Replaced or Obsolete
Benefits of using the Boston Matrix
The Boston Matrix helps businesses evaluate their product lines and allocate budgets effectively.
It suggests using profits from cash cows to support stars and question marks, and to consider selling or discontinuing dog products.
Over time, question marks can become either stars or dogs, while cash cows may eventually lose value and turn into dogs.
Limitations of using the Boston Matrix
Product may be in between, not high nor low
High market share does not always lead to high profit, high costs also involved with high market share
Matrix may be too simple
Mass market strategies
A mass market is one that caters for almost everyone, mass marketing is the process of selling products to all consumers the same way.
Different medias: TV, Radio, Newspapers, Mass media
Large quantities produced means lower average costs, high products.
Niche market strategies
A market segment is consumers who can be grouped in different ways.
A niche market is one that caters to a specific target consumers.
Products are design for a s specific purpose
Media to be used: Specialist magazines, trade fairs, websites, word of mouth, leaflets.
B2B market strategies
B2B: Business to business marketing
Businesses deal with other businesses rather than consumers.
Advertising need to be informative
Larger transactions
Build closer relationships with customers
Quality product and Quality service
B2C market strategies
B2C means business to consumer.
It involves one-time purchases and not building long-term relationships.
Consumers want convenient options like online buying, click and collect, and delivery.
Advertising is short and highlights benefits, creating an emotional connection with the product.
How can businesses improve customer loyalty?
Businesses have discovered that it is much cheaper to keep a loyal customer than to gain new customers through marketing
The expression “plugging the leaky bucket” is used – where business owners should focus on keeping their existing customers with loyalty schemes, discounts and extras rather than continually trying to attract new customers
Customer loyalty is creating a product or service that ensures repeat purchases
Ways to have effective customer service
Before purcahse:
Customer service can be defined as; the assistance and advice provided by a company to those people who buy or use its products or services
During purchase:
During the purchase e.g. on a car test drive, the sales person can answer questions on fuel economy, reliability and features of the car.
After purchase:
After the purchase e.g. repairs, warranties, guarantees and service plans
Use of loyalty cards
They can improve customer retention e.g. a coffee shop making sure customers return by offering a stamp
They can also collect important data on buyer behaviour and purchase decisions e.g. Boots advantage card, Tesco Clubcard
Use of saver schemes
Each week consumers can carry out their shopping and pay into a saver card – ready for Christmas
They are rewarded by the supermarket for paying in.
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