Unit 10: Ansoff's martix

The Ansoff Growth matrix is another marketing planning tool that helps a business determine its product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth strategies which set the direction for the business strategy.

These are described below:

Market penetration

 

Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:

• Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
• Secure dominance of growth markets
• Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors
• Increase usage by existing customers – for example by introducing loyalty schemes

A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Market development

 

Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

• New geographical markets; for example exporting the product to a new country
• New product dimensions or packaging: for example
• New distribution channels (e.g. moving from selling via retail to selling using e-commerce and mail order)
• Different pricing policies to attract different customers or create new market segments

Market development is a more risky strategy than market penetration because of the targeting of new markets.

Product development

Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive.  A successful product development strategy places the marketing emphasis on:

• Research & development and innovation
• Detailed insights into customer needs (and how they change)
• Being first to market

Diversification

 

Diversification is the name given to the growth strategy where a business markets new products in new markets.

This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks.  However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding.

Unit 10: Product Life Cycle

Product life cycle: notes & exercise from mattbentley34

Remember, you must try and relate all the theory we discuss to 'Tom Hortons'.

Unit 10: PEST Analysis

PEST analysis is concerned with the key external environmental influences on a business.

The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.

Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.

The table below lists some possible factors that could indicate important environmental influences for a business under the PEST headings:

Political / Legal	Economic	Social	Technological
Environmental regulation and protection	Economic growth (overall; by industry sector)	Income distribution (change in distribution of disposable income;	Government spending on research
Taxation (corporate; consumer)	Monetary policy (interest rates)	Demographics (age structure of the population; gender; family size and composition; changing nature of occupations)	Government and industry focus on technological effort
International trade regulation	Government spending (overall level; specific spending priorities)	Labour / social mobility	New discoveries and development
Consumer protection	Policy towards unemployment (minimum wage, unemployment benefits, grants)	Lifestyle changes (e.g. Home working, single households)	Speed of technology transfer
Employment law	Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates)	Attitudes to work and leisure	Rates of technological obsolescence
Government organisation / attitude	Exchange rates (effects on demand by overseas customers; effect on cost of imported components)	Education	Energy use and costs
Competition regulation	Inflation (effect on costs and selling prices)	Fashions and fads	Changes in material sciences
	Stage of the business cycle (effect on short-term business performance)	Health & welfare	Impact of changes in Information technology
	Economic "mood" - consumer confidence	Living conditions (housing, amenities, pollution)	Internet!

Unit 10: Tim Hortons

Here is a Prezi discussing the 4P's of Tim Hortons....

Below are several articles about Tim Hortons in Dubai. Take a look at them and think about their Marketing here in Dubai. Specifically, based on your own knowledge and information provided, do you think they should exapand into other Emirates and GCC countries?

The first article is from Tim Hortons own website. It discusses possible 'Strategic Marketing' decisions. Check it out and think about how successful they might be if they follow this straegy here in the UAE.

Tim Hortons Strategic Marketing decisions

Tim Hortons outlet in Dubai mobbed by Canadian expats

Tim Hortons opens five cafe, bake shops in UAE

Tim Hortons opens its 10th Cafe and Bake Shop at Dubai Mall

Tim Hortons, Cold Stone hiring in Dubai

Unit 10: Boston Matrix

Introduction to the Boston Matrix

A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.

A portfolio of products can be analysed using the Boston Group Consulting Matrix. This categorises the products into one of four different areas, based on:


•Market share – does the product being sold have a low or high market share?

•Market growth – are the numbers of potential customers in the market growing or not

How the Boston Matrix is Constructed

The Boston Matrix makes a series of key assumptions:

•Market share can be gained by investment in marketing

•Market share gains will always generate cash surpluses

•Cash surpluses will be generated when the product is in the maturity stage of the life cycle

•The best opportunity to build a dominant market position is during the growth phase

How does the Boston Matrix work?

The four categories can be described as follows:

•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

•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

•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?

•Unsurprisingly, the term “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.

Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.

The main values of using the Boston Matrix include:

•A useful tool for analysing product portfolio decisions

•But it is only a snapshot of the current position

•Has little or no predictive value

•Does not take account of environmental factors

•There are flaws which flow from the assumptions on which the matrix is based

However, the model can be criticised in several ways:

•Market growth is an inadequate measure of a market’s attractiveness

•Market share is an adequate measure of a products ability to generate cash

•The focus on market share and market growth ignores issues such as developing a sustainable competitive

•advantages

•The product life cycle varies

Summary

Questions - Construct a Boston Matrix for the following companies:

McDonalds
Tesco
Coke
Emirates Airlines
Apple
Toyota
Any other company you choose

Finally, all of you need to put together a Boston Matrix for Tim Hortons...

Unit 13: Business objectives

Objectives of a new business from tutor2u

Unit 13: Update

Organising an event – tick list

Introduction:                            This section will discuss what you are trying to achieve with this unit. (theoretical, but related to your possible events and the aims)

Aims & Objectives:                 These should be clear and to the point. Ie what is overall aim of the event (your own ideas…it could be to make money, to involve the community, to give to charity etc etc.

The objectives would be a list of how you plan to achieve the aim: ie feasibility study, primary/secondary research, finance etc

Event ideas:                            This section will include the discussion of the event ideas, your evaluation of each (the powerpoints) and the reasons why you chose what you did.

                                                You must include, primary research (basic - questionnaire/interview), secondary research (location information, costs of rent & material etc)

                                                Revenue approximation - ie How much money do you predict you will make

Presentations                         You will all present to the group. The powerpoints will be further evidence (I may also take photos!)

Decision                                  You will hold your first meeting (someone will chair the meet & someone will take minutes)

Conclusion                              You will all write a report based on what has been achieved so far. Why you came up with the decision you did.

Aims & objectives 2:              This will be specific to your chosen idea (rather than the general discussion you completed above)

Criteria for judging success: Explain what factors you are going to look at to judge success…these could be tickets sold, money raised, evaluation of event by others (you will have a questionnaire that viewers should fill in)

Feasibility Study:                   What is a feasibility study, what are the benefits of carrying one out.

Research:                                You will conduct both primary & secondary research. This will include your questionnaire, the results analysis and any interviews, both formal and informal.

                                                The secondary data will include costings, statistics from x factor, google stuff etc

Resources required:              A list of what resources you need with costings Sources of funding:                       

What are the possible sources of funds and what are you going to use??

Fundraising ideas:                           What options do you have, when are you going to do them, how much are you going to collect.

Cash Flow forecast:                        This will be based on all the info collected from above. You will analyse all the data, explaining each number.

Break even:                                        you will discuss importance of break even and then complete your own break even forecast for the event

Unit 14: Inflation for Business Students

The rising cost of goods and services - or as we know it, ‘inflation’ is one of the key measures that affect our financial well-being and also a word that scares many AS Business students. This article from the BBC helps to explain it in simple terms, which I think any AS Business student should be able to grasp. The Q&A section is particularly useful and may help with those PESTLE and Level 4 Evaluation Marks come the exams in May.

Market Segmentation at the Ritz!

When looking at the concept of market segments, target markets and niche markets this article about the Ritz Hotel could be a useful stimulus.

The Article Kidding Around in Luxury Hotels makes for interesting reading and could be a great discussion point for pupils. It’s a very clever marketing strategy to build up a strong customer base for the future.

Unit 14: External Influences on a Business - Iceland, Ras al-Khaimah

Check out the clip showing just what Iceland is all about. After the first 1 1/2 minutes, I will stop and you need to answer the following questions:

 

1. What was good about this opening clip?
2. What was not so good?
3. Does it make you want to go to Iceland?
4. How would you have made the video better?

 

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