Download Marketing - Revision

Marketing - Revision
1. Write down the 4Ps of the marketing mix;
a. Place; explain what is meant by a distribution channel
b. Price; define the following pricing strategies; competition pricing, penetration pricing, price
discrimination and skimming
c. Promotion: Write down 3 ways a local business could promote its product.
d. Product : When designing a product, what is the difference between primary and secondary
research.
Surveys
This involves asking questions of respondents who are normally split into different market
segments or part of a market that contains groups of buyers with similar buying habits.
Examples of market segmentation include: gender, age, income, socio economic or ethnic
groups.
Differing ways of conducting surveys include: postal, newspapers, telephone, personal
interviews and consumer panels. Surveys can contain a mixture of open and closed questions.
Sampling
A survey can’t ask every customer for their opinion so a fraction or sample is surveyed. To be
useful the sample must be representative of all consumers. Samples can be random (out of a
hat), systematic (every 100th person in a telephone directory for example are chosen) or
based on a quota or stratified sample (specific segment’s are chosen).
The Product life cycle
Growth
Maturity
Sales
Introduction
Research
and
development
Time
Decline
Obsolescence
Now attempt the power point: mini plenary product lifecycle
Product portfolio analysis
1. What is product portfolio analysis?
2. How might a firm use the product life cycle and the Boston Matrix to help it balance its
portfolio?
Most businesses sell a range of products this range represents a product mix or product
portfolio. Businesses manage their product portfolios so to keep up overall sales new products
are launched as others decline. A product portfolio analysis is therefore an analysis of the range
of products within a businesses portfolio e.g. which are doing well, which are likely to do better,
which should be withdrawn etc.
The Boston Matrix
The Boston Matrix allows a firm to
analyse its product portfolio in relation
to market share and market growth.
 Products are categorised as either a:





Question Mark
Star
Cash Cow
Dog
Market Share
High
M
a
r
k
e
t
G
r
o
w
t
h
Low
H
i
g
h
STAR
PROBLEM CHILD
L
o
w
CASH COW
DOG
Problem Child
 Question
marks have a low share
of a high growth market
 Also known as Problem Children
 Are often new products
 The firm may decide to BUILD on
existing sales by investing more in
promotion and distribution
Stars
 Stars
have a high market share of a
high growth market
 The firm may wish to use a
HOLDING strategy whereby it
maintains current levels of spending
to keep the product in this
category
Cash Cows
 Cash
Cows have a high market share
of a low growth market
 These are well established products
 Little or no investment is required
 Companies may wish to adopt a
MILKING strategy whereby they
use profits to support other
products
Cash Cows
 Cash
Cows have a high market share
of a low growth market
 These are well established products
 Little or no investment is required
 Companies may wish to adopt a
MILKING strategy whereby they
use profits to support other
products
Market Share
High
M
a
r
k
e
t
G
r
o
w
t
h
H
i
g
h
STAR (Hold)
Low
QUESTION MARK
Build/Invest)
L
o
w
CASH COW
(MILK)
DOG
(DIVEST)
Questions





What is the Boston Matrix used for?
Why do businesses need a variety of
products?
What is the problem with products
labelled ‘Problem Children’?
Explain what is meant by ‘Stars’
Why is it important to have ‘Cash
Cows’ in a product portfolio?
1. How might a firm use the Boston Matrix to balance it’s portfolio? Give examples to
support your answer. (8 marks)
Product trial and repeat purchase
Product trials are the way businesses persuade customers to try out a new product or service to
raise awareness of its existence and gain feedback on its possible success. Product trial is also
used to help build loyalty and establish repeat purchases.
What might a firm undertake (do) during a product trial?
•
•
•
•
•
Advertising
Free samples
User testing
Low trial prices
Targeting of trade buyers
Branding
1) What are the advantages of a firm branding a product?
•
•
•
•
Charge a Premium Price
To create brand loyalty
To increase sales and market share
To increase awareness of the product
2) What is a generic product and an own brand?
A generic product is one where it is very difficult to tell who has produced the product
e.g. potatoes, grain etc.
An own branded product is a product such as Netto Beans, which competes with
branded products on price.