Question 1: Using current products familiar to you, draw and label a product life cycle

diagram, showing which stage each product is at.

DVD Players/
Basic Mobile
Phones

Smart
Phones
Typewriters/
Black and
Smart TVs White TVs

Question 2: Suggest appropriate aims and objectives for a small,medium and large
business

AIM OBJECTIVE
Small Business To survive and find profits in the To make 15% return on
market investment
Medium Business To maximize profits and growth To achieve €12 million sales in
to expand their current business the first year
operation and current market
share

Large Business To achieve external growth such To grow by 20% every year for
as taking over their competitors the next three years
in the market

Add value and quality to their

products

To provide service in the

community like funding charities
Question 3: Explain the difference between market-orientated routes and product-
oriented routes in Ansoff’s matrix.

DIFFERENCE MARKET-ORIENTED ROUTES PRODUCT-ORIENTED ROUTES

Basic Focus
Approach to Customers
Approach to Advertising
Consumers. Responds to
marketing research and tailor
their products in accordance with
what they perceive to be the
demands of the market.
Led by the needs of its
customers. May invent or
discontinue a product based on
the desires of the customers.
Spends a great deal of money to
cultivate the brand in the minds
of potential customers.
Maximizing production output. A
company is succeeding when it is
manufacturing as many products
as possible at the cheapest
possible price.
Does not pay close attention to
its customers. Tends to look for
new customers if existing
customers are dissatisfied.
Advertising is not a big deal. The
company is fulfilled that
customers will buy if they are
aware of their products and can
afford it.

Question 4: Consider the decision taken by Kellogg’s to opt for product development.
Suggest a way which it could have diversified instead. Justify your answer.

Both healthy and convenience foods were in a strong position in the market for
Kellogg's. Nutri-Grain was the brand worth rescuing as it fitted well with its main
objectives and aims. With the Ansoff's Matrix' help, Market Penetration was the most
reasonable and best alternative for the given situation.

Penetration in the market involves re-launching the product or to increase brand

awareness and Kellogg's chose this strategy and have successfully implemented it.

If Kellogg's has to undergo diversification, the most possible and most likely
option for growth is to make an acquisition of a product line, such as a manufacturer of
quality oats. This diversification is justified because the strength of Kellogg's is its channel
or distribution management.