What is BCG matrix?
Is a matrix with a marketing planning tool which helps managers to plan for a balances product portfolio. It looks at two dimensions, market share and market growth, in order to assess new and existing products in terms of their market potential.
How BCG matrix works?
A business would place each individual product in its product portfolio (or product range) onto one of the quadrants of the Boston matrix based on the product's relative market share and the product's market growth in the industry.
There are four possible results from using the Boston matrix?
- Dogs
Are products with a low market share operating in low growth market. Dogs do not generate much cash for the business as the market tends to be stagnant or declinging, so businesses may try to dispose of these products. Firms that have too much products in this quadrant find that there is a lack of cash for the business.
- Problem child
Refers to products that operate in a high market growth sector, but have low market share. This can be a concern as problem children may represent inferior product quality or marketing to those of competitors. Given that the market has high growth, a business should analyse reasons for its low market share and then develop strategies to gain a higher share of the growing market.
- Stars
Are products that operate in high growth markets and have high market share. Hence, stars are highly successful products that tend to generate high amounts of cash for a business. For this reason, businesses will tend to invest money in developing and promoting their stars. It is hoped that many starts will eventually turn into cash cows for the business.
- Cash cows
Are products with high market share operating in a low growth market. These markets tend to be mature markets and the products are very well established, thereby generating superb net cash flow. Some cash cows run the risk of becoming dogs, so businesses tend to use extension strategies to prolong their high earning potential.
What is branding and how is it done?
Branding is a form of differentiating a firm's product from those of its competitors. A brand refers to a name that is identifiable with a product of a particular business (although the term can also refer to a sign, symbol, colour scheme, font or design) Interbrand, the internationally renowned branding consultancy, defines a brand as "a mixture of tangible and intangible attributed symbolized in a trademark". It gives legal protection to the registered firm to exclusively use a brand name or brand mark.
Learn More :
- Charles Revson started Revlon. He once said "We sell hope." Revson was defining the ______ of Revlon cosmetics.
- Blood donations to the Red Cross are considered __________ products.
- The distribution strategy during the decline stage of PLC involves building more intensive distribution networks
- Amazon and GEICO set themselves apart with their smooth-functioning direct delivery strategy referred to as __________ differentiation.
- Which value proposition is difficult to sustain in the long run?
- What are perceptual positioning maps used for?
- The Westin Stamford Hotel in Singapore failed when it once advertised itself as the world's tallest hotel. This difference was not worth establishing because it did not satisfy which of the following criteria?
- A company can differentiate itself from competitors using symbols such as McDonald's golden arches, Twitter's bird, and the Nike swoosh. Which type of differentiation is this?
- The winning value proposition by discount stores such as Walmart and Best Buy can be categorized as __________.
- Amazon and GEICO set themselves apart with their smooth-functioning direct delivery strategy referred to as __________ differentiation.
- One important consideration in using a differentiated targeting strategy is that ________.
- On the My M&Ms Web site, users can place custom orders for M&Ms. They can choose their own colors, put a personalized text message on the candies, and even upload a photo to be placed on each M&M. Which targeting strategy is M&M using here?
- Anythinglefthanded.com.uk only sells products designed for left-handed people. Which targeting strategy is it using?
- Instead of going after a small share of a large market, a firm goes after a large share of a smaller niche segment. This type of marketing strategy is known as __________.
- If men and women respond similarly to the same marketing mix, they do not constitute different segments. Gender would not be effective in this example because the segment is not ________.
- Toothpastes claim they "whiten teeth," "fight bad breath," and "reduce plaque." Which base of segmentation is being used in this example?
- ___ segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product.
- ______ segmentation divides buyers into different segments based on lifestyle or personality characteristics
- What is positioning?
- Which of the following statements about segmentation is true?
- What is the purpose of differentiation?
- The process of evaluating each market segment's attractiveness and selecting one or more market segments to enter is called ______
- The step in designing a customer value-driven marketing strategy in which a company divides a market into distinct groups of buyers is known as market _____
- Market ______ evaluates each market segment's attractiveness and selects one or more segments to serve
- Which of the following is an advantage to businesses that use computer databases to manage their inventory?