Boston Matrix & Niche Market Strategies PDF

**Assess the challenges that a business faces when moving from a niche to a mass marketing strategy** A niche marketing strategy appeals to a smaller segment of a larger market where consumers have specific needs and wants. Mass marketing aims to target the highest number of potential customers. O...

**Assess the challenges that a business faces when moving from a niche to a mass marketing strategy** A niche marketing strategy appeals to a smaller segment of a larger market where consumers have specific needs and wants. Mass marketing aims to target the highest number of potential customers. One challenge is the change in promotional costs. This is because it is likely the promotional strategy would have changed from lower cost/below the line advertising to more expensive/above the line advertising. This may affect the cash flow for a business Changing to a mass marketing strategy would require changes to the distribution networks. This is because in order to reach a global audience, it is likely that a business extended its distribution globally involving more retailers and wholesalers, the business is likely to have faced more competition. This may have led the business to reduce the price of its tea to compete with established businesses. However, the volume sold by a business in a mass market is likely to be much higher. This may lead to lower unit costs/economies of scale and increased profitability Mass marketing may create less of a risk to to a business. It may be less vulnerable to the economic change of individual economies The market for a particular product may be set to grow significantly by 2027 providing a business with an opportunity to increase its revenue and profits There are both risks and rewards for businesses using a mass market strategy, and success depends on effectively managing the change to benefit from economies of scale **Assess the benefits to a business of using the Boston Matrix to make decisions on the product portfolio** The Boston Matrix is a method of portfolio analysis based on market share and market growth. It categorises products into Cash Cows, Dogs, Stars and Question marks (Problem child) It can be used to analyse the current portfolio of products to help with future strategies and growth. For instance Cash from mature products such as the (give example) can be used to fund new products and designs. It will help in the decision-making regarding products that are regarded as dogs that may be discontinued, such as (give example) The Boston Matrix may help to identify products that are regarding as stars, such as the belts and laptop cases which are growing in popularity. Such products may need increased promotion to turn them into cash cows However, it is only a snapshot of the current product portfolio. It has little or no predictive value and does not take account of external factors such as other competitors selling personalised bags and scarves Just because products are categorised as dogs does not mean they must be removed - perhaps face masks still generate acceptable levels of revenue and should not be discontinued The Boston Matrix cannot be used in isolation and businesses must consider other external and internal factors to help them make important decisions on its product portfolio The Product life cycle may be a better method of portfolio analysis as it takes account of life span of products which is an important element in the fashion market **Assess the usefulness of the product life cycle to a business when making business decisions** Product life cycle describes the stages that a product goes through from introduction to decline. Some businesses have a wide variety of products in its portfolio and the product life cycle will help focus its marketing effort. A benefit of using the product life cycle is that it can help devise promotional strategies. New products in the range, which are in the growth stage, will benefit from advertising and promotion The model will help make decisions on the established products. Those products in the maturity stage, (give examples) may benefit from extension strategies to prolong the life of the product The product life cycle may help a business make decisions on those products with low sales in the decline stage. lt may help them to make decisions on which ranges to discontinue to maintain the reputation of the business The product life cycle may help a business make decisions on those products with low sales in the decline stage. lt may help them to make decisions on which ranges to discontinue to maintain the reputation of the business. However, the product life cycle is a simplistic model. Whilst there are many products whose sales follow the classical shape of the model, many others do not. It is very difficult for a business to predict the life of a product due to changing tastes and preferences The model does not take account of competitors\' actions. Some of a businesses shoes may move into the decline stage quickly if competitors introduce a superior product. Whilst the model is a good visual tool for analysing a portfolio of products, Businesses would need to take account of other research findings on competitors, the economy, changing trends etc before decisions were finalised on the product range