BCG GROWTH MATRIX Boston Consultancy Group

Introduction
The Boston Consultancy Group (BCG) matrix classifies product lines into four categories
based on market share and market share growth rates. The BCG growth matrix helps
firms to decide how much money to inest in a product line! based on whether a product
has a good market share and whether the market share is increasing! decreasing or
remaining constant.
"tar (#igh $elatie %arket "hare! #igh Growth)
& product classified as a star has a high market shares in a market that is growing. & star
is at the growth stage of the product life cycle so it will need inestment (money) to
maintain its growth rate and market leading position. It is also generating money for the
company so it is worth the inestment. The challenge for the business is to turn it into a
cash cow.
Cash Cow (#igh $elatie %arket "hare! 'ow Growth)
Cash Cows are products at the mature stage of the lifecycle! they generate high amounts
of cash for the company! but their growth rate is slowing. &s market growth rate is
slowing! inestment should be reduced to maintain current market share. There is a
chance product sales may start to decline! appropriate marketing mix strategies should be
employed to try to preent this from happening. The firm could also look at reducing
costs through price leadership strategies. & cash cow is at the maturity stage of the
product life cycle.
(ogs
These are products which hae low market shares and low market growth rates. & dog
will generate low profits or een a loss. Therefore dogs drain business money! time and
resources. If the dog is not proiding the company with any benefit e.g. gateway to other
product sales it is probably best to phase it out. "ome businesses may decide to re)inent
the dog and in*ecting new life into the product. (see #ein+ Case "tudy). & dog product is
at the end of the product life cycle.
,uestion %ark-.roblem Child
These are products with a low market share but operate in high market growth rates. The
challenge for the business is to discoer what is causing the low market share and
hindering growth. The danger is that the business inests a lot of money in the product
without an impact on growth rates. #oweer if the business can sole the problem a
/uestion mark product can generate good returns.
Conclusion
The BCG matrix is a good starting point when reiewing an existing product line to
decide future strategy and budgets. The market share is compared (relatie to) against the
largest competitor in the industry. The BCG helps firms analyse future opportunities or
problems with their product lines.
.orter0s Generic 1alue Chain %odel
2rganic Growth is the rate of a business expansion through a company0s own business
actiity! while Inorganic Growth means that the company has grown by merger!
ac/uisitions or takeoers. 3hen a company with help of its efficient management
enhances its growth rate it is referred to as organic growth which is also known as
Internal Growth whereas inorganic growth is attained when a company ac/uires a
technology deeloping company in order to enhance its competitie adantage and
growth rate and is also known as External Growth.
A List of the Different Types of Marketing Strategies
%arketing is a strategy used by companies to communicate with the consumer and make
him knowledgeable about the arious features of their products and serices. It is an
essential part of attracting the target buyers to a particular product! and companies use
arious innoatie or tried)and)tested techni/ues to stay ahead of their competitors and
make their place in the market.
#ere are some of the most popular and effectie types of marketing4
Affinity Marketing ) &lso known as .artnership %arketing! this techni/ue links
complementary brands! thereby creating strategic partnerships that benefit both
companies. 3hile one adds alue to existing customers by generating more income! the
other builds new customer relationships.
Alliance Marketing ) #ere two or more entities come together to pool in their resources
to promote and sell a product or serice! which will not only benefit their stakeholders!
but also hae a greater impact on the market.
Ambush Marketing ) This strategy is used by adertisers to capitali+e on and associated
themseles with a specific eent without the payment of any sponsorship fee! thereby
bringing down the alue of sponsorship. It has sub)categories like direct or predatory
ambushing or indirect ambushing by association! to name a few.
all to Action !TA" Marketing ) CT& is a part of inbound marketing used on websites
in the form of a banner! text or graphic! where it is meant to prompt a person to click it
and moe into the conersion funnel! that is! from searching to naigating an online store
to conerting to a sale.
lose #ange Marketing !#M" ) &lso known as .roximity %arketing! C$% uses
bluetooth technology or 3ifi to promote their products and serices to their customers at
close proximity.
lou$ Marketing ) This refers to the type of marketing that takes place on the internet!
where all the marketing resources and assets are transferred online so that the respectie
parties can deelop! modify! utilise and share them.
ommunity Marketing ) This techni/ue caters to the needs and re/uirements of the
existing customers! as opposed to using resources to gather new consumers. This
promotes loyalty and product satisfaction and also gies rise to word of mouth marketing
among the community.
ontent Marketing ) In this case! content is created and published on arious platforms
to gie information about a certain product or serice to potential customers and to
influence them! without making a direct sales pitch.
ross%me$ia Marketing ) &s the name suggests! multiple channels like emails! letters!
web pages etc are used to gie information about products and serices to customers in
the form of cross promotion.
Database Marketing ) This utili+es and information from database of customers or
potential consumers to create customised communication strategies through any media in
order to promote products and serices.
Digital Marketing ) This strategy uses arious digital deices like smartphones!
computers! tablets or digital billboards to inform customers and business partners about
its products. Internet %arketing is a key element in (igital %arketing.
Direct Marketing ) This is a wide term which refers to the techni/ue where
organi+ations communicate directly with the consumer through mail! email! texts! fliers
and arious promotional materials.
Di&ersity Marketing ) The aim of this strategy is to take into account the different
diersities in a culture in terms of beliefs! expectations! tastes and needs and then create a
customi+ed marketing plan to target those consumers effectiely.
E&angelism Marketing ) It is similar to word)of)mouth marketing! where a company
deelops customers who become oluntary adocates of a product and who promote its
features and benefits on behalf of the company.
'reebie Marketing ) #ere a particular item is sold at low rates! or is gien away free! to
boost the sales of another complimentary item or serice.
'ree Sample Marketing ) 5nlike 6reebie %arketing! this is not dependent on
complimentary marketing! but rather consists of giing away a free sample of the product
to influence the consumer to make the purchase.
Guerrilla Marketing ) 5nconentional and inexpensie techni/ues with imagination!
big crowds and a surprise element are used for marketing something! a popular example
being flash mobs.
By keeping in mind the distinctie features of the product! the demographics of the target
consumer and their spending power! and the current strategies of existing companies! an
effectie marketing strategy may be successfully created.
Types of Marketing Strategies
7xlore the strategies you will become familiar with as a professional marketer...
1ery often the success or failure of a company is a direct result of an effectie or not so
effectie marketing strategy. Therefore! choosing a marketing strategy that fits the
company product is of ital importance.
Deci$ing on your au$ience
The first step toward deeloping an appropriate marketing strategy is to know
your audience. &re they 89 to :9 year old gamers; :8 to <= year old football fans;
reating a (sychological (rocess (rofile
"econdly! you should create a hypothetical psychological process a buyer of your
product will take as a result of your marketing efforts. $ead more about consumer
psychology here.
onnect a Type of Marketing Strategy
Based on your understanding of the target audience and the process you wish to
take them through! choose a type of marketing strategy that you beliee will hae
the greatest positie impact.
Assess your Efforts
3ith whateer data is aailable through your marketing methods! assess whether
your assumptions were correct and react accordingly.
Types of Marketing Strategies )se$ by the (rofessionals
http4--www.marketing)schools.org-types)of)marketing.html
&ccount)based
%arketing
&ffiliate %arketing
&ffinity %arketing
&gricultural
%arketing
&lliance %arketing
&mbush %arketing
&nalytical %arketing
&rticle %arketing
B:B %arketing
B:C %arketing
B:. %arketing
Behaioral %arketing
Blackhat %arketing
7commerce
%arketing
7mail %arketing
7ntrepreneurial
%arketing
7thical %arketing
7angelism
%arketing
7ent %arketing
7xpeditionary
%arketing
6acebook %arketing
6ield %arketing
6lanking %arketing
Geomarketing
.ay)per)click
%arketing
.erformance
%arketing
.ermission %arketing
.ersonali+ed
%arketing
.ersuasion %arketing
.oint of "ale
%arketing
.ost Click %arketing
.recision %arketing
.roduct %arketing
.romotional
%arketing
Brand %arketing
Brick and %ortar
%arketing
Bu++ %arketing
Call Center %arketing
Campus %arketing
Catalog %arketing
Cause %arketing
Celebrity %arketing
Channel %arketing
Close $ange
%arketing
Closed 'oop
%arketing
Cloud %arketing
Communal %arketing
Community
%arketing
Computational
%arketing
Consumer)Generated
%arketing
Content %arketing
Contextual %arketing
Conersion $ate
%arketing
Cooperatie
%arketing
Corporate %arketing
Cross)%edia
%arketing
(atabase %arketing
(efensie %arketing
(irect %arketing
(irect %ail
%arketing
(isruptie %arketing
(iersity %arketing
(rip %arketing
Global %arketing
Green %arketing
Guerrilla %arketing
#ori+ontal %arketing
Inbound %arketing
Industrial %arketing
Influencer %arketing
Informational
%arketing
In)game %arketing
Integrated %arketing
Interactie %arketing
Internet %arketing
Internal %arketing
International
%arketing
'eft)brain %arketing
'ocal %arketing
'ong Tail %arketing
'oyalty %arketing
%egamarketing
%obile %arketing
%ultichannel
%arketing
%ulti)leel %arketing
>euromarketing
>ewsletter %arketing
>ext)Best)&ction
%arketing
>iche %arketing
>on)traditional
%arketing
2ffensie %arketing
2ffline %arketing
2ne)to)one
%arketing
2utbound %arketing
2utdoor %arketing
.roximity %arketing
.ull %arketing
.ush %arketing
$eal)time %arketing
$eferral %arketing
$elationship
%arketing
$emarketing
$eply %arketing
$eerse %arketing
"cientific %arketing
"earch %arketing
"elf %arketing
"erices %arketing
"hopper %arketing
"hotgun %arketing
"ocial %arketing
"ports %arketing
"tealth %arketing
"treet %arketing
Targeted %arketing
Technical %arketing
Telemarketing
Time %arketing
Trade "how
%arketing
Traditional %arketing
5ndercoer
%arketing
5ser)generated
%arketing
1ertical %arketing
1iral %arketing
3eb %arketing
3ord)of)mouth
%arketing
?outh %arketing