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135 Marketing Strategy
AS Edexcel New Specification 2015
Business
By Mrs Hilton for
From the specification
a) The product life cycle
b) Extension strategies:
product
promotion
c) Boston Matrix and the product portfolio
d) Marketing strategies appropriate for different types of
market:
mass markets
niche markets
business to business (B2B) and business to consumer (B2C)
marketing
e) Consumer behaviour – how businesses develop
customer loyalty
Guidance from
Edexcel
Guidance from
Edexcel
continued
Guidance from
Edexcel
continued
Lesson Objectives
• To be able to explain and apply the product lifecycle
theory
• To be able to discuss product lifecycle extension
strategies
• To be able to explain and apply the Boston Matrix
theory
• To be able to discuss marketing strategies
• To be able to explain consumer behaviour and
consumer marketing
• To be able to answer sample exam questions based on
the topic area
Starter
• Why did Dairy Milk change their packaging?
• Why did sure change their packaging? See
here
Definition of marketing from Edexcel
• The management process of identifying,
anticipating and satisfying consumer demands
for profit
A) PRODUCT LIFE CYCLE
Product life cycle
Revenue £
Maturity
Growth
Decline
Introduction
Development
Time
Product life cycle explained
• Different products have different lengths of
product life cycle
• The launch phase will involve high costs in
research and development and the product may
have been test marketed before launching e.g.
iwatch
• Growth phase products are enjoying rapid
growth in sales and profits and could gain
economies of scale at this point. Investment
would be in promotion to ensure sales remain
buoyant e.g. Salted caramel
• Maturity phase products face intense
competition now all the producers have joined
the market. Most cars, boats and TVs are in
this phase
• Decline phase products may be limited in
production or it may cease altogether e.g.
typewriters
Product lifecycle quiz
Another online
quiz here:
Link
B) EXTENSION STRATEGIES
Product lifecycle extension strategies product
• Jaguar land rover regularly
update their models
• This picture shows two range
rovers, one slightly newer than
the other, the engine and
chassis are the same the styling
has changed to extend the
brand
• Land Rover have been making
Range Rovers since 1970
• This strategy ensures that the
car remains in the maturity
stage of the product life cycle
rather than going into decline
and being withdrawn
• Much less risky than creating a
new product
• Builds on customer loyalty
• Less expensive than developing
a new product
Product lifecycle extension strategies promotion
• Re-packaging e.g. Lip tar (see
picture)
• Discounts e.g. DFS sale
• Re-branding e.g. Marathon
became snickers
• Adding extra features e.g. iPhone
6+ has a bigger screen than the
iPhone6
• New users e.g. toddlers at
Drayton Manor attracted by
Thomas the tank land which has
boosted flagging ticket sales
• New markets e.g. overseas
• More frequent use e.g. Shampoo
often says wash your hair twice
on the instructions
How is this an
example of
product
lifecycle
extension?
C) BOSTON MATRIX
Market share
High market share
Low market share
High
Market
Growth
Market
Growth
Low
Market
Growth
Move the graphics into
the right boxes
Boston Matrix Explained
Star:
• A product in this quarter will have
high market share and high market
growth
• This product may be in the growth
phase of the product life cycle
• Production of this product should
remain consistent while profits are
harvested
Question mark:
• Also known in some books as a
problem child
• A product in this quarter enjoys high
market growth but low market share
• This product may have just been
launched on the market and is
building its customer loyalty
• Products should be invested in while
their market share builds
Cash cow:
• Products in this quarter are reaching
the maturity of their product life cycle
but still have customer loyalty
• Products should be produced until
sales start to decline
Dog:
• Products in this quarter face declining
sales in declining markets
• Products may be in the decline phase
of their product life cycle
• For example video tapes or top hats
• These products should be removed
from sale
4 min video on Boston Matrix
D) MARKETING STRATEGY
Marketing strategy for a mass market
• A mass market is one that caters for
(almost) everyone, mass marketing is
the process of selling products to all
consumers regardless of age, gender,
etc in the same way
• These products can be marketed to
consumers all over the world in the
same way
• Large quantities produced mean lower
average costs means EOS means high
profits
• Media used will be TV, radio,
newspapers, mass media
• Examples include: Perfume, pop stars,
coca cola, computers and Microsoft
Marketing strategy for a niche market
• A market segment is consumers who can be grouped
in different ways; income, gender, lifestyle, ethnicity,
religion, age, interest
• A Niche market is one that caters to a small subset
of a segment and will target consumers in a very
specific way
• Products are designed for a specific purpose
• Small turnover keeps larger firms from entering
market
• Inelastic demand means higher prices can be
charged
• Media used will be specialist magazines, trade fairs,
websites, word of mouth, leaflets
• Examples include; vegetarian shoes, gourmet scotch
eggs, Harry Potter school bags. Article from BBC
here, camel milk, optical illusion bags
B2B marketing
• B2B stands for Business to Business
marketing. Many businesses just deal
with other businesses rather than
consumers. For example a school or
college will have a paper supplier so
they can keep giving you handouts
and you can print your work out.
• Advertising needs to be informative
rather than persuasive or “clever”
• This will typically involve larger
transactions than with consumers
(think paper again)
• Suppliers need to build up closer
relationships with customers
• Transactions often on an order /
invoice system
• Focus will be on offering a quality
product and a quality service
B2C marketing
• B2C means business to consumer
• Consumers want to know the benefit of as
product
• They are not looking to build up long term
relationships with the supplier, maybe a
one off purchase like a sofa
• Consumers want a variety of distribution
channels for convenience, see a larger
version of infographic here
• Short message which clearly point out the
benefits
• Emotional connection with the product or
supplier e.g. John Lewis watch the Bear
and Hare advert here, Penguin advert
here
E) CONSUMER BEHAVIOUR
Customer loyalty
• Product based on
customer loyalty to
football teams: Watch
Dragons Den pitch here
• Customer loyalty cards can
be used to encourage
repeat business and to
gather data about buyer
behviour
Sample question 1
• 8 mark question
• Case study on next slide
• Levelled answer will require evaluation
Sample question 2
4 marks, 2 of which are for application (context)
Linking product theory with dynamic market
theory
Case study on next slide
Answer question 2
Plenary Interactive product Life Cycle
Series of videos
• Don’t just sit passive through the videos, make
notes, pause them to review the information
and ask if you have any questions…
Revision Video
Extra revision video
Glossary
• Product life Cycle; the stages that a product moves through over
time
• BCG matrix; The Boston Consultancy Group or Boston Matrix for
short, a marketing portfolio analysis tool
• Extension strategy; a plan to extend the maturity stage of a product
life cycle of a product, either through changes to the product or
promotions to boost sales
• B2B marketing; Business to business marketing
• Mass Market; A market which caters to everyone, for example corn
flakes or toothpaste
• Niche market; A small market with very specialised customers, for
example Harley Davidson motorbikes
• Dynamic market; a market that is subject to rapid or continuous
change