Principle of Marketing
Principle of Marketing
Principle of Marketing
ID; 9937
Name; Atta Ullah Afridi
F.name; Faqir Khan
Program; BS-SE
Course; principles of Marketing.
Teacher; Madam Saima Bano
Section; D
Assig Title; Marketing mix, BCG, Marketing Expansion Strategy.
University; City University of Science and Information Technology.
Being forward looking there is always uncertainty and risk associated with deciding strategy.
The question ‘what is strategy?’ therefore also implies a set of strategic options from which one
chooses a course of action to achieve advantage. Strategy is more about a set of options or
"strategic choices" than a fixed plan.
A marketing mix is associated with the four Ps: price, product, promotion, and
place.
problem that was only noticeable after a certain amount of time, and Apple
needed to be able to combat that problem. Anything that an organization
introduced to make ease for people and to solve the problems of people.
Sometimes, the four Ps are expanded to include the seven Ps. In addition to the
usual four Ps, the seven Ps include the inclusion of physical evidence, people, and
process.
Definition
BCG matrix (or growth-share matrix) is a corporate planning tool, which is used
to portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis
(horizontal axis) and speed of market growth (vertical axis) axis.
Growth-share matrix is a business tool, which uses relative market share and
industry growth rate factors to evaluate the potential of business brand portfolio and
suggest further investment strategies. If your customers are in a huge amount, it means
your market / business grows. Then that is called market Growth.
Relative market share. One of the dimensions used to evaluate business portfolio
is relative market share. Higher corporate’s market share results in higher cash returns. This is
because a firm that produces more, benefits from higher economies of scale and experience
curve, which results in higher profits. Nonetheless, it is worth to note that some firms may
experience the same benefits with lower production outputs and lower market share.
Market growth rate. High market growth rate means higher earnings and
sometimes profits but it also consumes many cash, which is used as investment to
stimulate further growth. Therefore, business units that operate in rapid growth
industries are cash users and are worth investing in only when they are expected to
grow or maintain market share in the future.
Assignment # 1
There are four quadrants into which firms brands are classified:
Dogs.
Dogs hold low market share compared to competitors and operate in a slowly growing market.
In general, they are not worth investing in because they generate low or negative cash returns.
But this is not always the truth. Some dogs may be profitable for long period of time, they may
provide synergies for other brands or SBUs or simple act as a defense to counter competitors
moves. Therefore, it is always important to perform deeper analysis of each brand or SBU to
make sure they are not worth investing in or have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation
Cash cows:
Cash cows are the most profitable brands and should be “milked” to provide as much cash as
possible. The cash gained from “cows” should be invested into stars to support their further
growth. According to growth-share matrix, corporates should not invest into cash cows to induce
growth but only to support them so they can maintain their current market share. Again, this is
not always the truth. Cash cows are usually large corporations or SBUs that are capable of
innovating new products or processes, which may become new stars. If there would be no
support for cash cows, they would not be capable of such innovations.
Strategic choices: Product development, diversification, divestiture, retrenchment.
Stars.
Stars operate in high growth industries and maintain high market share. Stars are both cash
generators and cash users. They are the primary units in which the company should invest its
money, because stars are expected to become cash cows and generate positive cash flows.
Yet, not all stars become cash flows. This is especially true in rapidly changing industries, where
new innovative products can soon be outcompeted by new technological advancements, so a
star instead of becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration, market
development, product development
e.g. Samsung
Question marks. Question marks are the brands that require much closer consideration. They
hold low market share in fast growing markets consuming large amount of cash and incurring losses. It
has potential to gain market share and become a star, which would later become cash cow. Question
marks do not always succeed and even after large amount of investments, they struggle to gain market
share and eventually become dogs. Therefore, they require very close consideration to decide if they are
worth investing in or not.
Strategic choices: Market penetration, market development, product development, divestiture
Assignment # 1
E.g. Fanta, a Coca-Cola product, is one such example where the business units can be seen as a
question mark.
1. Mission statement
While a mission company describes what a company wants to do
now. The Mission Statement concentrates on the present; it
defines the customer(s), critical processes and it informs you
about the desired level of performance. In mission we describes
the purpose of the company.
2. Vision statement
A vision statement outlines what a company wants to be in
the future. The company describes that what to be in future. The
Vision Statement focuses on the future; it is a source of
inspiration and motivation. Often it describes not just the future
of the organization but the future of the industry or society in
which the organization hopes to effect change.
1. Invention:
When a product comes for the first time, we say that it is invented or it is an
invention.
Assignment # 1
2. Differentiation;
When we bring changes in the existing product, which is produced already,
then we say it is differentiation. If you cannot bring changes in your product
due to which your business goes down then you must try to change your
market.
3. Market penetration:
Market penetration means to follow the flexes, advertisements,
commercials and so on in order to make your business/ market popular.
When either you do not have force to invent the new products or to bring
changes in the existing products then you must follow the market
penetration.
4. Product development:
In product development, we adds some new features into the product.
Like we do market penetration in order to bring changes in the product
for the impression of customers.
5. Market development:
Widely spread your company/ market into sub branches or you can also
produce different sorts of products. Like you would produce Pepsi and
also you would produce some pops etc.
6. Diversification:
Diversify means different, the product must be new and the market
must be new. As you would produce, Pepsi and you would produce
some pops etc.
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