Page 193 - Cambridge IGCSE Business Studies

14: Marketing strategy

Situation C
A new mobile phone is soon to be launched onto the market by the market leader. The company will use market skimming
to set price.

Situation D
A large supermarket chain in Country X has announced that it will reduce fuel prices by 5% from next Monday. This will make
its petrol and diesel much cheaper than all other major retailers.
Working in pairs, discuss which element of the marketing mix will be the most important to consumers in each situation.

Deciding marketing strategy
A business’s marketing strategy is a plan to achieve its marketing objectives using a
given level of resources.
Once a business has set its objectives then it will need to take decisions about

Product life cycle: product, price, promotion and place to achieve them. These decisions will depend
see Chapter 12, page 167. to some extent on the marketing budget available and the stage the product is at in
its life cycle.

ACTIVITY 14.2

Cyber Software produces educational computer games aimed at children aged 5–11. It has developed a new game, Matrix,

which is based on the adventures of a young boy who is able to travel backwards and forwards through time. 191
The marketing team has been asked to develop a strategy for the launch of Matrix. It has been allocated a promotional
budget of $20,000. The Marketing Director has set a sales objective of 5,000 units in the first year.
The Marketing Manager has carried out market research using both primary and secondary research methods, including
a focus panel of ten boys and girls from the target market who were given the opportunity to play the game and comment
on what they liked and disliked. It was clear from the market research that Matrix could be a very popular product once one
or two small changes had been made to the product and its packaging. However, the educational games market is very
competitive. The Marketing Manager knows she will have to plan the marketing strategy for the launch of Matrix carefully if
the marketing objective set by the Director is to be achieved.
The Marketing Manager has decided to set a price which is almost the same as that of competitors’ software products of

a similar type.
Part of the budget for promoting Matrix will be used to place advertisements in children’s magazines. She has asked
another member of the marketing team to design a poster for display in shops that sell other Cyber Software products. She

believes that Matrix can be distributed through existing channels of distribution.
Once the product has been launched, the Marketing Manager will monitor sales in the first few weeks to make sure that
the strategy she has developed is working.

1 Why has the Marketing Manager carried out market research before the launch of Matrix onto the market?
2 Why did she decide to price the product ‘close to competitors’ prices’?
3 Why do you think the Marketing Manager decided to advertise Matrix in children’s magazines and have a poster designed
for shop display?
4 Why was Matrix not advertised on television?
5 What are the advantages to Cyber Software of using existing distribution channels for launching Matrix onto the market?

6 What is the benefit of monitoring the sales of Matrix in the first few weeks of it coming onto the market?