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Chapter 3
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Learning Objectives
explain how to determine the purpose of an organization identify different types of business models define what is meant by a product and describe Kotlers five levels of product benefit describe and criticize Copelands product typology understand the stages in, and uses of, the product life cycle explain the concept of portfolio describe the composition and limitations of the BCG matrix and the GE matrix
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
A good is tangible and is something that can be owned. A service is something that is done on the buyers behalf and is intangible in nature.
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Specialty goods are seen as products that are so differentiated from others, often carrying considerable prestige, that customers may insist on only one brand.
Shopping goods are those that are typically more expensive, of more interest to the purchaser, and some risk is seen in the purchase
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Product Lifecycle
The product life cycle is the complete life of a product or service from its inception and growth, through shakeout and maturity, to its eventual decline and death.
Sales
Introduction
Growth
Maturity
Decline
Time
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
High
Stars
Question marks
Cash cows
Dogs
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Low
GEC Matrix
Market attractiveness
High A B C
Medium
Low
G High
H Medium
I Low
Competitive strength
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Reading
Aaker, D.A. (1995) Strategic Market Management (4th edn), New York: John Wiley & Sons. Coates, N. and Robinson, H. (1995) Making industrial new product development market led, Marketing Intelligence and Planning, 13(6): 1215. Doyle, P. (1994) Marketing Management and Strategy, Englewoods Cliffs, NJ: Prentice Hall. Jobber, D. (1995) Principles and Practice of Marketing, New York: McGrawHill. Lancaster, G. and Massingham, L. (1993) Marketing Management, London: McGraw-Hill. Sowrey, T. (1990) Idea generation: identifying the most useful techniques, European Journal of Marketing, 42(5): 209. Von Hippel, E. (1978) Successful industrial products from customer ideas, Journal of Marketing, 42(1): 3949.
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction
Review Questions
1. Explain how the purpose of the organisation can impact on its strategic priorities. 2. Define what is meant by a business model and give examples of different types of business models in the retail sector.
3. Explain what is meant by the term product and how products provide benefit to users.
4. Using theory related to the concept of portfolio, explain why it is important for an organisation to have a balanced portfolio.
David Campbell, David Edgar & George Stonehouse Business Strategy: an introduction