Using the Marketing Mix: Product

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                Only focuses on the current state of the business and not the future opportunities/threats

              Does not take into consideration external environmental factors

              Does not take into consideration the fact that market share and market growth are only two factors of an attractive industry

              The matrix assumes that each category is independent from the others and that they are not linked when in fact they are.

              • Helps a business analyze a product portfolio’s contents

              Advantage of Using Boston Matrix

              • By doing this it also helps that business make portfolio decisions

              • Can ‘map’ the strengths and weaknesses of particular products

                                                                                                                                                                                                                                                                          • • Helps manage cash-flow

                    Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows. Example Iphone 5s

                    Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars. It has relatively high profit with  low investment. The revenue used from the cash cow is used to invest in the Question mark / problem child. Example Coca cola drink

                    Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?. Example Lipton's Herbal tea

                    “Dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed. Example Fosters Beer

                                Product Development: Changing aspects of goods and services to meet the changing needs of existing customers or to target a different market.

                                Product line: a set of related goods or services.

                                Product mix: the full range of products offered by a business, also known as product portfolio.

                                6 Product Development process:

                                1) Creativity- coming up with the idea

                                2) Defining the concept

                                3) Developing the concept

                                4) Testing and finalizing the concept

                                5) Full product launch

                                6) Managing the product life cycle

                                Factors that influence product development:

                                • Advance in technology
                                • The actions in competition
                                • The entrepreneurial skills of managers and owners- how much risk they are willing to take? Do they have the skills to develop products
                                • Financial situations.

                                5 stages of product life cycle:

                                1) Development stage

                                2) Introduction stage

                                3) Growth stage

                                4) Maturity stage

                                6) Decline

                                Product life Cycle: The path of a product from its introduction onto the market. to its eventual disappearance from that moment. Shows the different stages in the life of a product and sales that can be expected at each stage.

                                Use of product life cycle:

                                • Illustrates the broad trend in sales Revenue

                                Extensions strategies:

                                • Find new uses for the product
                                • Finding new markets for existing products

                                Develop a wider product range

                                • Aiming the products towards specific target markets
                                • Changing appearance of packaging

                                Unique Selling Point: A feature of a product that makes it unique from any other products in the market.

                              • BOSTON MATRIX:

                                Disadvantage of using Boston Matrix

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