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The marketing models I will evaluate will be SWOT and PEST analysis, the product life cycle, the Boston Matrix and the Ansoff Matrix.

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Introduction

Objective 4 Marketing strategies/models In this objective I will be analysing the different marketing models and evaluating their reliability. The marketing models I will evaluate will be SWOT and PEST analysis, the product life cycle, the Boston Matrix and the Ansoff Matrix. SWOT and PEST analysis In the previous objective, I analysed SWOT and PEST of Cadbury. These enabled me to gain insight into the external and internal influences that may arise which may either be beneficial or cause problems for the launch of my product. Product life cycle The product life cycle shows the sales of a product over time. To be able to market a product, Cadbury must be aware of the product life cycle of its products. The cycle can be demonstrated as below: Introduction Following planning and development, the product is introduced onto the market. This stage includes characteristics such as: Low initial sales, due to limited knowledge and no consumer loyalty Heavy promotion to build brand image and consumer confidence Losses (low profits at best) due to heavy development and promotion costs Limited distribution levels, but high stockholding for the manufacturer Growth At this stage, consumer knowledge and loyalty has grown, and the company increases sales and begins to make profits. There may be a growing number of competitors who may introduce similar products or adapt their price and promotion policies. Maturity The maturity phase is where the profits and sales reach their peak. Profits are being maximised, but the firm has to fight to defend its market position. Sales are maintained by promotion, customer loyalty and product differentiation through alternations such as new packaging. At the end of this stage, the market becomes saturated. Decline This stage is where total sales fall for the company. To make up for this, the company may reduce prices, cutting into its profit margin. This is the end of the product and its life cycle. ...read more.

Middle

This has a medium risk strategy because the product already exists and there is an interest in it, but it is intended for a different market. Product expansion New products are developed for existing markets. This also holds a medium risk strategy. The firm already exists in the market, but the company has to rely on its customer loyalty in order for them to buy a new product. Diversification New products are developed for new markets. This has a high-risk strategy, as there is no certainty that people will be interested in the product or buy into the market. Diversification can be classified as: * Horizontal * Vertical * Conglomerate Horizontal diversification refers to the development of activities, which are complementary to or competitive with the organisation's existing activities. Vertical integration refers to the development of activities, which involve the preceding or succeeding stages in the organisation's production process. Backward or upstream vertical integration takes place when the organisation engages in an activity related to the proceeding stage in its production process. Forward or downstream vertical integration takes place when the organisation engages in an activity related to a succeeding stage its production process. Conglomerate diversification refers to the situation where at face value the new activity of the organisation seems to bear little or no relation to its existing products or markets. The advantages of diversification include: * Cost savings due to the effects of synergy (where the combined effect exceeds the sum of the individual effects) * Spreading of risk * Control of supplies (mainly related to vertical integration) * Control of markets (mainly related to vertical integration) * Improved access to information * Escape from declining markets * Exploitation of under-utilised assets * Possible disadvantages of diversification include: * Inefficiency due to loss of synergy * Inefficiency due to loss of managerial control Cadbury and the Ansoff Matrix Cadburys use Market Penetration when they re-launch, advertise or use special offers to increase sales. ...read more.

Conclusion

Product Life Cycle Boston Matrix Introduction Question mark Growth Star Maturity Cash Cow Decline Dog This can be explained because when a product is first introduced to a market, it has a low share of a high market growth, making it a question mark. A dog is a product with a low share of a low growth market and is therefore in the decline stage. Ansoff's market expansion is same as the extension strategy in the Product Life Cycle because it is an existing product in a new market. This can also be linked with Boston's question mark or star because the product being re-launched must be a product that is successful and either in the introduction or growth stage in the product life cycle. At the growth stage in the Product Life Cycle, a company should expand market share by trying to get new people to try the product and existing customers to buy more. The company should therefore use market expansion. In the decline stage, the company should try to re-launch the product, which would be using product or market expansion. Market penetration could be used if a successful product was being re-launched to increase the company's market share, but this would not work if the product were a dog. The marketing models can be influenced other factors and research. Cadbury's competitors may affect the company's use of the Ansoff Matrix. The model is used to analyse the strategic direction of a product, and if a product was placed in the market expansion, which has medium risk strategy, and competitors also released a similar product in this section, there will be a higher risk strategy, which will affect the product's performance and position in both the Boston matrix and the product life cycle. My questionnaire told me there was a gap in the market for my product, and my SWOT analysis reinforced this. This then tells me that my product should do well as a question mark, in the introduction stage of the product life cycle and as product expansion. ?? ?? ?? ?? 30 Victoria Canavan Marketing Coursework ...read more.

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