2. Marketing - Revision

3. 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.

4. 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).

5. The Product life cycle S a l e s Time Research and development IntroductionGrowthMaturityDeclineObsolescence

6. Now attempt the power point: mini plenary product lifecycle

7. 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of products within a businesses portfolio e.g. which are doing well, which are likely to do better, which should be withdrawn etc.

8. The Boston Matrix The Boston Matrix allows a firm to analyse its product portfolio in relation to market share and market growth. 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: Products are categorised as either a: Question Mark Question Mark Star Star Cash Cow Cash Cow Dog Dog

9. Market Share Market GrowthMarket Growth HighHigh LowLow HighLow CASH COW STARPROBLEM CHILD DOG

10. Problem Child Question marks have a low share of a high growth market Question marks have a low share of a high growth market Also known as Problem Children Also known as Problem Children Are often new products Are often new products The firm may decide to BUILD on existing sales by investing more in promotion and distribution The firm may decide to BUILD on existing sales by investing more in promotion and distribution

11. Stars Stars have a high market share of a high growth market 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 The firm may wish to use a HOLDING strategy whereby it maintains current levels of spending to keep the product in this category

12. Cash Cows Cash Cows have a high market share of a low growth market Cash Cows have a high market share of a low growth market These are well established products These are well established products Little or no investment is required Little or no investment is required Companies may wish to adopt a MILKING strategy whereby they use profits to support other products Companies may wish to adopt a MILKING strategy whereby they use profits to support other products

13. Cash Cows Cash Cows have a high market share of a low growth market Cash Cows have a high market share of a low growth market These are well established products These are well established products Little or no investment is required Little or no investment is required Companies may wish to adopt a MILKING strategy whereby they use profits to support other products Companies may wish to adopt a MILKING strategy whereby they use profits to support other products

14. Market Share Market GrowthMarket Growth HighHigh LowLow HighLow CASH COW (MILK) STAR QUESTION MARK Build/Invest) DOG (DIVEST) (Hold)

15. Questions What is the Boston Matrix used for? What is the Boston Matrix used for? Why do businesses need a variety of products? Why do businesses need a variety of products? What is the problem with products labelled ‘Problem Children’? What is the problem with products labelled ‘Problem Children’? Explain what is meant by ‘Stars’ Explain what is meant by ‘Stars’ Why is it important to have ‘Cash Cows’ in a product portfolio? Why is it important to have ‘Cash Cows’ in a product portfolio?

16. 1. How might a firm use the Boston Matrix to balance it’s portfolio? Give examples to support your answer. (8 marks)

17. 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

18. 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.