IB DT Topic 2 - Market Strategies

Market Strategies

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Market Strategies - Overcoming resistance

Value Barrier

Improve product performance.

Improve product Positioning

Reduct Price.

Risk Barrier

Use a well known brand name

Elicit endorsements and testimonials

Facilitate trials

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Market Strategies - Overcoming resistance

Tradition Barrier

Educate Customers

Use change agents

Understand and respect traditions (coping strategy)

Image Barrier

Borrow a good image (brand name)

Make fun of a negative image

Create a unique image.

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Pioneering Corporate Strategy

Pioneering Corporate Strategy = being ahead of the competitors by introducing a new product first but has a potential for large gains

  • RISKY (cost)
  • Needs to be a financially secure company
  • Requires product champion to push new ideas.
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Imitative and Hybrid Corporate Strategy

Imitative Corporate Strategy = develop a product similar to the "pioneered" as quickly as possible.


Hybrid  Corporate Strategy.

  • adopt an expensive and risky pioneering strategy for some products
  • safe and imitative for others
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Market Penetration

Market Penetration - the extent to which a product is recognized and bought by customers in a particular market

Increasing Sales to existing customer or finding new customers for an existing product.

  • Occurs when a company penetrates a market with current products
  • Best way to achieve = gaining competetors’ customers
    OR attracting non-users of the product
    OR convince current clients to use more of your product
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Market Development and Product Development

Market Development: a process for developing sales - new business and new markets
Effective for developing all types of businesses, and delivers business growth via:

  • New products or services for existing customers
  • existing products for new customers
  • new products for new customers

Product Development - The creation of new, modified, or updates products aimed mainly at company’s existing customers

Objectives = growth of the company

This is done by developing a range of products building on an established brand

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A strategy to increase the variety of business, service or product type within an organisation. 

Can be a growth strategy, taking advantage of market oppertunities, or may be aimed at reducing risk by spreading interests over different areas

  • Horizontal diversification =  expansion of a similar product area
    eg. Cadbury’s fruit and nut --> Crunchie
  • Vertical diversification = company moves into a different level of the supply chain, eg, a manufacturing company going to retail 
    eg. Bugatti Car --> Bugatti Kitchen appliances 
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Market Sector and Market Segmentation

“a broad way of categorising the kinds of market the company is aiming for"

Market Sector: used in economics and finance to describe a set of businesses that are buying and selling similar goods and services that they are in direct competition with each other

  • automotive
  • security
  • leisure
  • industrial 

Market Segmentation

“Markets divide up into similar segments where the purchasers have similar characteristics and tastes"

A market segment is a subgroup of people sharing a characteristic. Eg. gender, interest, age, ethnicity, location.

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Robust Design

Flexible designs that can be adapted to changing technical and market requirements"

Robust design method, also Taguchi method, helps ensure customer satisfaction.

  • Improving fundemental function of the product or process.

It is the most powerful method available to:

  • Reduce product cost
  • Improve quality
  • Reduce development interval
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Product Family

“a group of products having common classification criteria. Members normally have many common parts and assemblies"

Focusses on the process of engineering new products in such a way that it is possible to reuse product components and apply variability with decreased costs and time. Used a lot in the motor vehicle industry.

  • reusing components and structures wherever possible therefore GREEN


  • Higher productivity
  • Higher Quality
  • Faster time-to-market
  • Lower labour needs
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