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Unit 1 - Marketing objectives and strategies :star: - Coggle Diagram
Unit 1 - Marketing objectives and strategies
:star:
Marketing objectives
= goals that a business attempts to achieve through its marketing activities
Increase revenue
=
if revenues are higher, it is likely that profits are higher.
a business could invest in an online advertising campagin, sponsor an international event, reduce its price or widen its ditribution
Build a brand
=
stronger brand name means that it is likely to be recognized by many people.
if a business aims to build a brand it may exploit a USP, invest heavily on TV ads or social media.
Increase market share
=
having a larger market share is likely to make a business more competitive.
As market share grows, a business will produce more output and it may exploit economies of scale which will reduce costs.
to win a larger market share, a business may have to invest in advertising campaigns or adjust its pricing strategy.
Product life cycle
= shows the different stages that a product passes through over time and the sales that can be expected at each stage.
Development
= the product is being researched and designed. A decision will then be made if the product should be launched or not. It is likely that the business will spend to develop its product and costs will be high. There will be no sales so the business will not receive revenue.
Introduction
= Initial sales are likely to be slow. A business is likely to spend on promotion to raise awareness of the product. Prices may be set high to cover promotion costs.
Growth
= sales may begin to grow rapidly, there may be repeat purchases. Unit cost may fall as production increases. Product becomes profitable. Competitors may launch their own version which can lead to a slowdown of the rise in sales
Maturity
= sales will have reached their highest point and competitors will have entered the market. businesses may use extension strategies to extend the life of their products
Decline
= sales will decline due to volatile customer tastes. The product will lose its appeal to customers.
Extension strategies
=
promotion
product adjustments (repackaging the product or update the product)
extend product range
:check: identify which stage the product is at
:red_cross: never predict the time that a product will take in each stage of the cycle.
Boston matrix
= a 2 x 2 model that analyses a product portfolio according the the growth of the market and its market share.
Product portfolio
= collection of products a business is currently marketing.
STARS ( high market share and high market growth) =
▪Invest to sustain growth
▪Maintain or build market share
▪Repel challenges from competitors
▪create barriers to entry (customer loyalty)
CASH COWS ( high market share and low market growth) =
▪ Defend Market Share
▪ Reduce investment in order to maximise cash flow and profits
▪Use profits from cash cows to invest in question marks and stars.
QUESTION MARKS ( low market share and high market growth) =
▪Invest to increase market share
▪Try to build competitive advantage- e.g. through selective market segmentation and positioning
▪Build selectively and invest in the most likely to become stars
▪Cash flow likely to be NEGATIVE
DOGS (low market share and low market growth) =
▪Not worth investing in
▪Uses up more management time and resources that can be justified
▪Phase out, or sell off
:check: It is a useful tool for analysing product
:check: helps business decision
:red_cross: Only a snapshot of current position
:red_cross:Focus on market share and market growth ignores issues such as developing sustainable competitive advantage.
Strategies for diff markets
Niche market
=
Product
- will be designed carefully to meet customer needs
Price
- more flexibility in pricing, so businesses can charge a higher price.
Promotion
- businesses needs to identify their customer profile accurately to ensure that advertising is not wasted.
Place
- more likely to use exclusive distributers and even through online.
Business to business and Business to customer
=
Outbound
- involves directing material at potential customers whether they are expecting it or not (email, telephone)
Inbound
- involves attracting potential customers to websites when they are looking for suppliers (social media, video marketing)
Hybrid
- combination of both inbound and outbound. once inbound methods start to generate meaningful leads some of the less effective outbound methods can be dropped. This will help to reduce costs and create sustainable market share growth.
Mass market
=
Product
- developing a USP to stand out from high competition.
Price
- businesses fear a price war so businesses in the mass market usually use competitive pricing.
Promotion
- invest heavily in advertising
Place
- use multiple channels to distribute their goods.
Marketing mix
= mix of marketing elements used by a company. Price , product, promotion and place.
How businesses develop customer loyalty
1) Communication ( regular communication helps to build a relationship between a business and a customer)
2) Customer service ( customers are more likely to return when they receive high quality customer service)
3) Customer incentives ( many businesses reward their customers if they keep returning)
4) Personalisations ( may address individual customers by their name)
5) Preferential treatment (many airlines have VIP lounges at airports).