Mr. Fewtrell – Marketing
Business Studies
Nicholas Drake
12th October 1998
1. Marketing Strategy is a medium to long term plan for meeting the marketing objectives laid out by the business. The word ‘strategy’ would intimate a carefully planned and thought out plan by the business on how it will conduct itself over a stated period of time. The plan should take into careful consideration the activity between both new and existing products – with emphasis placed on costed budgets. This strategy will then be implemented through the marketing mix. A successful strategy is one than will achieve all the objectives without going over the budget.
2. SWOT analysis is the assessment of a product, division or organisation in terms of it’s Strengths, Weaknesses, Opportunities and Threats. This system is laid out in a simple four box format which may be used to great emphasis at conferences or business meetings. It is a simple way in which a business may analyse each product for example in terms of it’s Strengths, Weaknesses, Opportunities and Threats.
3. Internal factors
The internal factors for devising a marketing plan may include the above mentioned SWOT analysis which may give the business a full knowledge of it’s marketing assets.
Also, a business may consider devising a strategy for achieving the objectives that operates within a defined budget and covers: NPD, new product launches and going brands.
External factors
The external factors for devising a marketing plan may include the collation of information regarding the sales, budgets and accounts for many of the businesses closest rivals. This will give the business a more detailed account of the progress of the whole sector for which the business is in and not just a general overview from their particular market segment.
4. Scientific marketing may include marketing based around the ideas around quantitative research and the involvement of statistical data and previously collected data. Hunches within marketing may be based around ‘gut’ feeling and current fads, trends and the latest fashions within a particular market
5. The product life cycle is the theory that all products follow a similar life course of conception, birth, growth, maturity and then subsequently decline, although products through these stages understandably at different speeds. The modern cigarette was introduced in 1873 and sales peaked in 1973 (implying a life cycle of around 200 years), whereas the entire life span of Power Ranges was three years.
6. The problems of prediction is mainly that with anything involving humans, peoples opinions towards a certain type of product may change overnight in view of negative publicity etc. Demand is never constant, it is continuously changing variable and so through predicting the sales growth or product life cycle of a product, one is taking into question the thought that humans behave with a degree of predictability which is of course untrue.
7. Extension Strategies are methods implemented by a company through which it seeks to increase sales of a product whose sales are falling. This product may be entering into the decline stage of the product life-cycle and so in an effort to maintain the high levels of sales, the company will introduce extension strategies such as: Promote more frequent usage of the product, suggest through promotion different applications of the product, for instance Walls advertising during the Winter months to eat ice-cream (therefore trying to reduce the seasonality associated with it’s products). Also another extension strategy is to change the packaging of the product and re-launch it with a new theme for example.
8. The relationship that exists between cash flow and capacity utilisation is as follows. Capacity utilisation is the extent to which the maximum capacity of the firm is being used, i.e. actual output as a percentage of maximum potential output. Cash flow however is the sum of cash inflows to the organization minus the sum of cash out-flows, over a specific period. The relationship that exists between the two is that both of them need to take into account the effect of fixed costs on the running of the business.
9. The Boston Matrix is a method of analysing the current position of the products within a firm’s portfolio, in terms of their market share and growth within their market-place . It includes four main categories:
Rising Star = High market share, High market growth
Problem Child = Low market share, High market growth
Cash Cow = High market share, Low market growth
Dog = Low market share, Low market growth
10. The USP or Unique Selling Point of a product is a quality or feature of a product which is unique to that product and which no other product offers. This will be a prominent feature in the marketing of this product as businesses like to let customers know the number of USP’s associated with a product
11. Promotion above the line is the advertising of a product or service through consumer media such as television, radio, magazines and newspapers.
Below the line promotion is a marketing term to indicate promotional activity other than main media advertising. It includes price and added value promotions, POS displays, and sampling and selling.
12. Informative advertising is paid for advertising that provides messages based on facts rather than images. An extreme example may be the advertising of a Car Boot Sale. Less clear-cut example may include the newspaper advertisements for electrical goods shops that scream persuasively about their sale bargains.
Persuasive advertising is communication to customers designed to appeal to the emotions. Favourable or distinctive images are used to encourage the target market to identify with the product or service being promoted.
13. The factors that should be taken into account when setting the marketing budget may include what levels of sales the product is expected to make. For example, if Coca-Cola were to release a new style flavour then it would be expected that sales would be extremely high and so it would make a great provision for extensive R+D, market research etc. If however, a small business is considering marketing a new product, then it may only considering direct promotion because the R+D budget may be cut.
14. The business may measure the effectiveness of it’s marketing spending by analysing both the sales revenue from the particular product and also by undertaking market research and seeing if the product that you are supplying to the market is satisfying the majority of potential customers. Also, one may look at the products market share within the particular market and how the competition has lost out to this new product or marketing spending.
15. Extrapolation market research is when a business may predict the future sales of a product based upon past sales figures and carrying on a general trend in an effort to predict the future behavioral patterns of a particular market.
Test marketing is when a business will launch a new or improved product within a tightly defined geographical area. Launching a product nationally is so expensive in production costs, advertising expenditure and opportunity cost that many firms will not take the risk of assuming that successful market research findings will mean successful sales.
16. Television advertising
Advantages
Disadvantages
17. Price elasticity of demand is a measure of the way that the demand for a good responds to a change in its price.
Income elasticity measures the way in which demand changes when consumers’ real income changes.
18. The two main factors that affect the price elasticity of demand are:
19. The types of good or product that may have zero or negative income elasticity of demand may include:
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