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1.3.5 Marketing strategy - Coggle Diagram
1.3.5 Marketing strategy
The product life cycle
a pattern of sales over time that most products tend to follow. The cycle has four stages following the launch, these are: introduction, growth, maturity and decline
key decision making benefit to the PLC model is to help make effective marketing decisions according to which stage the good is in the plc
Development stage
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as product is close to being finalised, firm could alert customers of launch
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Introduction stage
costs + launch costs are high, sales low and overheads are spread over very few units
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Growth stage
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product may be modified given initial customer response, could increase range
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increasing distribution as retailers are more willing to stock and product is rolled out to more markets (more the retailers, wider the audience)
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Maturity stage
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promotion may lead to focusing on highlighting their uniqueness compared to competitor's alternative
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Extension strategies
products that are in their maturity or going into the decline stage, businesses would sometimes consider an extension strategy to gain more sales from the product through the medium-long term
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Exam tip
This strategy is used to try and solve a business problem. With all problem solving, the best solutions will always address the specific causes of the problem - recognising whether this is happening in a case study offers a great evaluation
Boston matrix
assess each product within a firm's product portfolio under the consideration of market share and growth
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Star
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a lot of investment is needed to maintain this level but it will fight off competition and will result in future profitability
cash cow
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can generate relatively high sales with low marketing expenditure and can result to significant profits that the business can use to further develop other goods in their product portfolio
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Building
attempts to boost sales of a product with a bright future but unstable current position - often used with problem childs
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Product portfolio
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a business will continue to develop new products as old products that are obsolete or do not generate sales are killed off
to manage a product portfolio, marketing managers would analyse it regularly and use Boston matrix to assist them
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