1. Marketing Strategy 1.3.5 Lesson Objective:
To understand the project life cycle
To be able to explain the Boston Matrix

2. Starter
Cadbury recently changed the packaging for their Dairy Milk chocolate bar – why do you think this was?
It was because the Glass and a Half campaign was old – it was also no longer factually accurate. The new campaign they created is an example of an extension strategy

3. Marketing
Is the management process of identifying, anticipating and satisfying consumer demands for profit
We have already looked at the Product Life Cycle and the stages that a product goes through throughout its life

4. Length of the life cycle
Remember some products have long product life cycles. This means that they are on the market for many years (Bisto Gravy for example)
Other products have shorter life cycles, they are introduced, marketed for a while and then withdrawn (such as the Sony Walkman)

5. Product life cycle Using the internet, I want you to find;
3 examples of products that have had short product life cycles
3 examples of products that have had longer product life cycles
What factors contributed to the length of the products life cycle - what marketing activities did they use to keep the product ‘alive’
Did they change the product at any point to keep it in the public eye? If so what did they do?

6. Extension Strategies
Extension strategies are ways to prolong the life of a product before it starts to decline.
Businesses want to extend the life of their products as it equals more revenue – extension strategies help a product to generate more cash and cover the cost of product development (very expensive)
Extension strategies can include;
Product adjustments
Promotion

7. Product adjustment
Many companies try to prolong the life of the product by ‘freshening it up’. This can involve making improvements, updating the product, repackaging or extending the product range
Updating is a common approach for technical products
They could add value by making improvements – e.g. making them faster, have more memory, look better etc… In the service industry it could be added extras (e.g. breakdown cover with your bank account)
They could extend the range – e.g. Walkers are constantly launching new flavours of crisps
Some just change the packaging to give the impression that the product has changed – e.g. selling the same fizzy drink in a can, plastic bottle and a glass bottle

8. Promotion
Some businesses prefer to leave the product the same but give a boost to sales by launching new promotional campaigns
One way is to find new uses – e.g. WD40 now removes dirt, grease and loosens screws!
Some businesses try to find new markets for their products – this can involve exporting to a new country or just by selling in a new region/area
Investment in a sizeable advertising campaign can help to get people reinterested in a product and increase sales
Businesses can also encourage more frequent use of a product – e.g. cereal manufacturers sometimes encourage people to eat cereal for supper as well as breakfast (Special K)

9. Task
Look at the following products – how have they extended the life of their product?
What strategies did they use – explain your answers
OXO Shake & Flavour
Land Rover
Drayton Manor Theme Park
Marathon chocolate bar (Snickers)
iPhone 6+

10. Product Portfolios
Product life cycle analysis shows businesses that sales of products usually always end up in decline. A well-organised business with one or more products will attempt to phase out old products and introduce new ones – this is known as managing the product portfolio
We already know that the product portfolio is the complete range of products on offer by a company, whereas a product line is the variety of a similar product

11. Managing a portfolio
By organising their launch at regular intervals businesses can ensure that there is never a gap in the market. As one product starts to decline, another is launched.

12. Boston Matrix
One problem for firms when planning their product portfolios is that it is very difficult in practice to determine what stage of the cycle a product is at
A useful tool for allowing firms to analyse their product portfolios is the Boston Matrix (sometimes called the Product Portfolio Matrix)
This matrix categorises products according to
Market growth – how fast the market for the product is growing
Relative market share – how strong is the product within its market, compared to others? Is it the market leader?

13. Boston Matrix – an introduction

14. Boston Matrix

15. Boston Matrix explained
High market share %
Low market share %
Rising Star
Product will have high market share and high market growth
May be in the growth phase of the life cycle – production will need to be constant
Often need constant advertising
Question Marks (or problem child)
High market growth but low market share
Product may have just been launched and not have much customer loyalty
Big investment to develop and advertise to start with big sales potential for the future
Cash Cow
Products in this stage are reaching maturity
Still likely to have customer loyalty and will be produced until sales start to decline
Profits from cash cows help fund new products. Sales made with little investment
Dog
These products are facing decline
Sales are falling and it may be taking profit to keep the dog alive – such as video tapes/top hats
High market growth %
Low market growth %

16. Task
Using the internet I want you to create a Boston Matrix diagram for either – Cadbury, Mars or Nestle
These companies sell many brands of chocolates, in the UK and abroad.
Individually, using the internet produce a list of all the chocolate brands/products for one of the 3 companies, you then need to create a Boston Matrix diagram for the company of your choosing
Which are their cash cows? Which are their question marks?

17. Marketing strategies
A marketing strategy is a set of plans that aim to achieve a specific marketing objective.
These strategies will vary according to whether you are targeting a mass or a niche market

18. Mass market strategies
Product
Price
Many products vying for customer attention
Developing a USP will help a product to stand out
Larger quantities produced
Prices charged are likely to be similar
All businesses will fear a price war
Price leadership is common
Price can be lowered due to EoS
Place
Promotion
Multiple channels will be used for distribution
Businesses may pay supermarkets to display their goods in prominent positions
Internet will be used increasingly
Absence of price competition
Non-price competition more important
Heavy investment in advertising and promotion
Media will include TV, radio, newspapers etc…

19. Niche market strategies
Product
Price
Product likely to be different from rivals
Carefully designed products to meet specific needs
Product is the most important element
More flexibility in pricing
Less competition – due to speciality – keeps large firms out
Inelastic demand means higher prices can be charged
Place
Promotion
More selective over distribution channels
More likely to use exclusive outlets
Will use the internet, if practical
More targeted advertising
Will use specialist magazines, trade fairs etc…
Less need to use national media

20. Strategies for B2B Outbound marketing strategies
Involves direct marketing material at potential customers whether they are expecting it or not (through , telemarketing, trade fairs etc…). However they are often ignored
Inbound marketing strategies
This involves attracting potential customers to websites when they are looking for suppliers or solutions to problems. Methods include; blogging, social media, search engine optimisation, video marketing. This requires a great deal of effort and resources
Hybrid strategies
This involves a combination of both outbound and inbound methods, it is estimated that inbound methods take approximately 6 months to generate results. Outbound methods are often used initially to bridge this gap

21. Strategies for B2C Developing customer loyalty through; Communication
In a mass market, this might include national advertising campaigns. Regular communication helps to build a relationship and encourages repeat custom
Customer service
Customers are more likely to return if the service is good
Customer incentives
A lot of businesses now use loyalty cards. Again this keeps them returning
Personalisation
Some businesses try to deal with customers on a personal level. This could be by dealing with them by name to build relationships
Preferential treatment
VIP areas in nightclubs. VIP lounges at airports, free Wi-Fi etc…