IB DT Topic 2 - Market Strategies

Value Barrier

Improve product performance.

Improve product Positioning

Reduct Price.

Risk Barrier

Use a well known brand name

Elicit endorsements and testimonials

Facilitate trials

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.

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

• RISKY (cost)

• STRONG R&D = EXPENSIVE

• Needs to be a financially secure company

• Requires product champion to push new ideas.

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

 TAKES ADVANTAGE OF R&D IN EXISTANCE= CHEAPER & LESS RISKY

Hybrid  Corporate Strategy.

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

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

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

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 

“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
eg:

• 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.

“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

“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

Benefits:

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