Higher Business Management
Marketing
BM Unit 2 - LO2
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Learning Intentions:
To introduce the concept of MARKETING.
Success Criteria:
Give a description of marketing and what it means to you.
Use general knowledge of marketing within the Business world.
Be ready to move into the full topic of marketing.
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Marketing – What it means to me?
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Marketing
“The process involved in
identifying, anticipating and
satisfying consumer
requirements profitably”.
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Identifying Consumers’
Requirements
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What do they want? Consumers must buy
products and continue to do so
Fierce competition and consumers’
expectations mean that products must be
constantly updated and altered to suit
Other factors - price, quality, prompt
delivery, attractive packaging and aftersales service
Advertising and promotion play a big part
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Anticipating Consumers’
Requirements
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What do they want today?
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What do they want in the future?
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Trends must be considered to
anticipate future needs
Volatile markets - fashion, toys,
technology (mobile phones,
computers, etc)
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Satisfying Consumers’
Requirements
“The customer is king!”
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Businesses must be customer-focused
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No customers
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no business
Must offer - good service, quality
products, value for money, prompt
delivery, good after-sales service (eg
returns), well presented and packaged
goods, at the right price and available
at the right place
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Learning Intentions:
To introduce marketing casualties and success
stories.
Success Criteria:
•Identify and describe marketing casualties in both the UK and
World-wide markets
•Identify and describe marketing success stories in both the UK
and World-wide markets
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The casualties of not
adapting to the market
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The American car industry
The British motor cycle
industry
In pairs have a discussion to
see if you can think of any
others.
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Marketing Successes
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Swatch
Starbucks
Easyjet and Ryanair
http://www.businessstudiesonline.co.uk/live/index.
php?option=com_content&view=article&id=35&Ite
mid=23
http://www.businessstudiesonline.co.uk/live/index.
php?option=com_content&view=article&id=35&Ite
mid=23
In pairs have a discussion
to see if you can think of
any others.
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Marketing a Strategic Activity (long term!)
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Inception/design
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Price
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Distribution
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Selling and promotion
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After-sales services
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Assessment (looking) of
the Market
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Where are the consumers of the
product?
How many consumers are there?
What are their attitudes and
preferences?
How effective are the distribution
methods?
What are the strengths and weaknesses
of competitors?
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Product v Market Leader
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Product-led Product Orientated and
Production Orientated
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Putting a product on the market
without prior market research
Assumption of best available and no
real competition
Often new inventions like Dyson
vacuum cleaners or Playstation 2
A risky approach which can fail British motor bikes
Making as many products as possible
at the lowest price
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Market-led Customer Orientated and
Sales Orientated
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Considering what the customers want before
putting a product on to the market
Competition has led to companies focusing on the
needs of the customer
Also looks at the influences on purchasing decisions
Pressure to sell to the public
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Marketing Products
and Services
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Consumer goods
Industrial goods
(capital goods)
Services (intangible)
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The Marketing Environment
Consumer trends and behaviour
Competition
Government
THE MARKET
The economy
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Technology
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Branding
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Branding
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Branding distinguishes a product
from its competitors
Instantly recognisable by
consumers
Often linked to quality and
reliability
Can command a premium price
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Unique Selling Point (USP)
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Try to identify the
USP of each of the
products listed
opposite
Think of how they
are presented to you
in the advertising you
see daily on TV, in
newspapers and
magazines
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Coca Cola
Nike
Kit Kat
Sunny D
Skoda Cars
Mercedes Cars
Baxter’s Soups
Fairy Liquid
Finish
(dishwasher tablets)
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Own Brands
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Products branded
with the name of the
store selling them
Most of the big
supermarkets
(Tesco) and chain
stores (Boots) have
their own brands
Often cheaper
alternatives to
branded goods
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Make a list of as
many “own brands”
you can think of.
Indicate which
branded product
they are designed
to rival
Eg “Wheat Bisks”
by Morrisons to
rival “Weetabix”
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The Marketing mix
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The Marketing Mix
Product
People
Price
Physical
Environment
Promotion
Process
Place
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Product
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Product/Service
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Core
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Actual
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Augmented
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The basic product - eg
toothpaste cleans teeth
The way the product is
presented - design, brand
name, packaging, etc
(Colgate toothpaste - red
packaging)
Additional features protection against decay,
fresh breath, attracting
the opposite sex, etc
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The Product Life Cycle
£000
Costs/Sales
New
Idea Product
Launch
Youth
Growth
Maturity
(Saturation)
Decline
Death
Time
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Extending the
Product Life Cycle
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Providing variants - Mars: fun-sized,
yoghurt, ice cream, mini-sized, giant-sized
Altering the packaging for different
market segments
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Altering the channels of distribution
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Changing the price
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Changing the product - size, colour, taste
Special promotions - offers, gifts,
competitions
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The Product Mix
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Very few companies have only one
product
Some companies have a range of related
products eg Proctor & Gamble
Some companies have totally unrelated
products in their product portfolios eg
Imperial Group
It is important that you have new
products being launched to replace
products going into decline in your
“Product Mix”
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Product Innovation
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Generating an idea
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Analysing the idea
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Producing a prototype
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Test market
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Adapt product to solve problems
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Launch the product
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Learning Intentions:
To introduce PRICE. Price being one of the factors
linking into the MARKETING MIX.
Success Criteria:
To enable pupils to:
•describe pricing objectives
• identify how businesses use pricing strategies to price
products and services
•describe short-term pricing tactics and give current examples
•be able to describe pricing methods and elasticity of demand
BM Unit 2 - LO2
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BBC Price Clip
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http://www.tutor2u.net/blog/ind
ex.php/businessstudies/comments/pricing-inuk-supermarkets/
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The Price of a Product?
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The price of a product is one of the
main factors in buying that product.
Too low a price could give the impression
of poor quality and too high a price may
not give the feeling of value for money
Price is influenced by:- the product
being new, what competitors are
charging, the product’s stage in its lifecycle, the selling location, the market
segment and many other factors
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Pricing Strategies
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Low-price strategy
in a market with strong competition
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Market-price strategy
petrol – matching competitors
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High-price strategy
up-market, exclusive image
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Short-term Pricing Tactics
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Skimming – high initial price for max profit
Penetration – low initial price for new
product (
Destroyer – eliminating the competition
(‘EasyJet’/’Ryanair’)
Promotional – lowering prices for a period
to ‘promote’ more sales
Demand-oriented – charging different
prices according to the level of demand eg
cross-channel ferry fares in summer
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Place
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Place - Distribution Channels
Producer 1
Producer 2
Producer 3
Consumer
Retailer
Wholesaler
Consumer
Retailer
Consumer
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The Wholesaler Function
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Buys in bulk from producers (low
transport costs) and sells to retailers in
smaller quantities
Bears stock-holding risk
Offers a wide variety of goods in small
quantities
Packages and labels goods
Offers advice to both producers and
retailers as to which goods are selling
well
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The Retailer Function
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Breaks down bulk to quantities
consumers wish to buy and store at home
Provides information to consumers
through advertising, displays and trained
staff
Stores a variety of goods, displays them
and marks on prices
Offers range of related services credit, HP, after-sales service and
delivery
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Types of Retailer
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Multiple Chains - M&S, Dixons, Boots
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Supermarkets - Tesco, Asda, Safeway, etc
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Co-operatives
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Independent - convenience stores, corner
shops
Department Stores - Jenners, Harrods,
Selfridges
Franchises - Benetton, Body Shop, McDonald’s
Others - mail-order, internet, direct-response
advertising, telephone and TV shopping channel
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Learning Intentions:
To introduce PROMOTION. Promotion being one
of the factors linking into the MARKETING MIX.
Success Criteria:
To enable pupils to:
•describe types of promotional activities
• identify how businesses use promotional techniques to sell
products and services
•describe types of advertising and give current examples
•describe the role of Public Relations (PR) within promotional
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activity.
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Promotional Strategies
Three main aims:
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Persuading - to purchase the
products
Informing - telling consumers
about the product
Reminding - that the product
still exists
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Main Types of Promotion
Above The Line
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TV and newspapers to reach mass
audience
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A lot of waste
Below The Line
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Directly controlled by the business
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Sales promotion, direct mail, trade
fairs - targeted consumers who may
be interested
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Main Types of
Sales Promotion
Into the pipeline
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Enhancing sales
to trade outlets
Helping retailers
to sell to their
customers eg
displays, posters,
videos, etc
Out of the pipeline
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Helping to
persuade
customers to buy
from retailers
Providing free
samples, a
percentage extra
free, 2 for 1
offers, money-off
coupons, etc
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Advertising Decisions
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The effect on Sales?
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The target market?
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Why do the consumers NOT buy
the product?
Which is the best medium to
use?
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Types of Advertising Media
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Print - newspapers and
magazines
Broadcast - TV, radio and
cinema
http://www.tellyads.com/recen
t_additions.php
Outdoor - billboards, posters,
etc
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Public Relations (PR)
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Supporting and promoting a charity
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Sponsoring sporting or cultural events
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Product endorsement by celebrities
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Improving the image of the product and
organisation
Press conferences and press releases in
times of difficulty or when good
publicity can be obtained
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Learning Intentions:
To introduce MARKET RESEARCH and
MARKET SEGMENTATION.
Success Criteria:
To enable pupils to:
1.
To introduce pupils to market research and techniques, linking to
marketing mix from previous lessons.
2.
To introduce ICT and how it links to Market research
3.
How linking MKT RES and Market segmentation creates a common
goal – to aim product or service at particular group.
4.
To be able to summarise marketing topic.
BM Unit 2 - LO2
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Market Research Definitions
http://www.businessstudiesonline.co.uk/live/index.php?option=com_content&view=article&id=49&Itemid=48
“Market research
is the systematic
gathering,
recording and
analysing of data
about problems
relating to the
marketing of goods
and services.”
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“Market research
is the means by
which those who
provide goods and
services keep
themselves in
touch with the
needs and wants
of those who buy
these goods and
services.”
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The Need for
Market Research
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Predict changes
required in its
product/service
Identify what is selling
Identify who is buying
the product/service
Explain what is
happening in the market
Investigate possible
courses of action
Identify the size of the
market
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Discover what
consumers think of the
product
Discover what
consumers are willing
to pay
Discover if a promotion
is appropriate
Discover if the
packaging is
appropriate
Identify what
competition exists now and in the future
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Methods of Research Primary
Primary data is gathered by field research
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By observation or asking people questions
Up-to-date
Collected for the exact purpose of the
organisation
Not easily available to competitors
Time-consuming
Expensive
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Market Research Secondary
Internal Sources
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Sales figures
Stock figures
Accounting records
Customer comments
Sales reps reports
Market research
data gathered
previously
External Sources
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Government
publications - social
and economic trends,
annual statistics,
population census
Competitors’ data annual reports,
promotions, price lists,
web sites
Newspapers, trade
magazines, Mintel
(research org), etc
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ICT and Market Research
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Databases compiled by research
agencies
Electronic point of sale information
(EPOS)
Supermarket loyalty cards
Stock control software gives sales
breakdown
Web sites - customers can e-mail
comments back to the company
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Problems with
Market Research
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Sampling Bias - small sample can
give a wrong impression
Human Behaviour - opinions change
rapidly
Interviewer Bias - leading
questions may be asked
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Market Segmentation
“Breaking down of markets into sub-groups
that can be targeted with a specific marketing
mix.”
Advantages
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Seller can meet buyers’ requirements
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Advertising can be focused - less wasteful
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Expertise developed for a specific market
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Higher sales
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Increased profits
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Methods of Segmentation
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Age
Gender
Socio-economic grouping
Education level
Income
Religion
Residential area
Lifestyle preferences - hobbies,
politics
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BM Unit 2 - LO2
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The Marketing Topic
This is probably the most
important topic in Higher
Business Management. Do as
much reading on it as you can
and arm yourself with as many
up-to-date examples of
marketing as you can!
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The Marketing Environment
THE MARKET
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The Product Life Cycle
£000
Costs/Sales
Time
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