Transcript Document

Business Studies
Marketing Strategy
Content
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Objectives and marketing
Niche marketing
Mass marketing
Product differentiation
Product life cycle
Product portfolio analysis
Ansoff matrix
Marketing decision making
Scientific decisions vs hunches
Marketing Objectives
• Marketing objectives are targets that the marketing
department wants to achieve
• These objectives help businesses achieve their overall
objectives
• Marketing objectives allow businesses to achieve their
marketing strategies
• Examples of objectives:
– To increase market share by 5%
– To increase distribution by 4%
Niche Marketing
• Niche marketing is where a business
concentrates on a small segment of the market
• This is often used by small companies as it is a
way of avoiding competition who may not be
interested in such a small segment
• E.g. Gardening magazines, Science fiction
books
Strategy
• A firms marketing strategy depends on a number
of things:
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Its resources
Their strengths and weaknesses
Competition
Skills and assets of the business
Market opportunities and threats
Marketing objectives
Mass Marketing
• Mass marketing strategies aim the strategy at
the whole market
• This is generally used by larger companies
whose products appeal to everyone
• E.g. Ariel washing powder, TV magazines,
Bestsellers
Product Differentiation
• This is how businesses make their products stand out
from the competition
• They can use USPs – unique selling points to
differentiate their products
• By differentiating products you are able to charge a
premium price
• Differentiated products are often aimed at specific
market segments as they have the features they desire
Product Life Cycle
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The Product Life Cycle shows the life of a
product from its conception to its death
There are five stages in the product life cycle:
1. Research and development – the product is being
developed, high costs
2. Introduction – the product is introduced to the
market, sales are low, profit is negative as
research and development costs are being met
Product Life Cycle cont…
3. Growth – Sales increase rapidly, firm starts to
make a profit
4. Maturity – Sales reach their peak, profits start to
decline as competition increases
5. Decline – Sales fall, profits begin to fall, the
product might be taken off the market
Product life Cycle
Extension Strategies
• Firms often try and extend the life of their
products to stop them going into decline
• Extension strategies include:
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Reduce price of product
Find alternative uses for product
Increase frequency of use of the product
Change packaging
Product Portfolio Analysis
• Classifies products according to two dimensions:
– Market growth
– Market share
• Organisations aim to have a “balanced portfolio”
ideally with cash cows where they can reap the
profits and stars that will grow into cash cows
PLC & Product portfolio Analysis
• These tools can be used to analyse the portfolio
of products a business offers
• Businesses need to ensure that they have
sufficient new products coming onto the market
for the future
• New products are funded by profits from
products in the maturity phase of the PLC / cash
cows
Product Portfolio Analysis
Ansoff Matrix
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Four different strategies a business can implement
Market penetration – sell more products to existing
customers
New product development – sell new products to
existing customers
Market development – sell existing products to new
customers
Differentiation – sell new products to new customers
Ansoff Matrix
Marketing Decision Making
• Methods are based on the situation, time
available and the managers expertise
• Managers make marketing decisions based on:
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Data
Hunches
Scientific Method
Experience
Scientific Method
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Marketing objectives are set
Data is gathered
Data is analysed
Marketing strategy is developed
Marketing strategy is implemented
Results are reviewed – this leads back into
objectives
Summary
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Marketing objectives are targets to achieve
Niche marketing – small segment of the market
Mass marketing- whole market
Product differentiation – use of USPs to make products stand out
PLC – classifies products due to their stage in the PLC
Portfolio analysis – classifies products due to market size and
growth
• ANSOFF matrix – gives a selection of strategies using new /
existing products and markets
• Marketing decision making – can be made using scientific
method or experience