MARKETING
MANAGEMENT
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DEVELOP A MARKETING PLAN FOR
A PRODUCT OF YOUR CHOICE.
Refer to Sample Marketing Plan
Page No. 57-58
Marketing Management: A South
Asian Perspective
BCG Matrix
BOSTON CONSULTING GROUP (BCG) MATRIX is
developed by BRUCE HENDERSON of the BOSTON
CONSULTING GROUP IN THE EARLY 1970’s.
According to this technique, businesses or products are
classified as low or high performers depending upon their
market growth rate and relative market share.
Market share is the percentage of the total market that is
being serviced by your company, measured either in
revenue terms or unit volume terms.
RELATIVE MARKET SHARE (RMS)
RMS = Business unit sales this year
Leading rival sales this year
Example
Market Share of the World's Largest Music Companies
COMPANY
Universal Music Group
Time Warner Music
Sony
Bertelsmann's BMG
EMI
Independents
MARKET SHARE IN 2007
27%
17
16
14
10
17
RMS = Business unit sales this year
Leading rival sales this year
= 16 = 0.59%
27
Market growth (MGR) is used as a measure of a
market’s attractiveness.
MGR =
Individual sales - individual sales
this year
last year
Individual sales last year
Markets experiencing high growth are ones where
the total market share available is expanding, and
there’s plenty of opportunity for everyone to make
money.
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Each circle represents
a separate division.
The size of the circle
corresponds to the
proportion of corporate
revenue generated by
that business unit
The pie slice indicates
the
proportion
of
corporate
profits
generated
by
that
division.
STARS
High growth, High market share
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Stars are leaders in business.
They also require heavy investment, to
maintain its large market share.
It leads to large amount of cash consumption
and cash generation.
Attempts should be made to hold the market
share otherwise the star will become a CASH
COW.
CASH COWS
Low growth , High market share
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They are foundation of the company and
often the stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little
cash as possible
They are located in an industry that is
mature, not growing or declining.
DOGS
Low growth, Low market share
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Dogs are the cash traps.
Dogs do not have potential to bring in much
cash.
Number of dogs in the company should be
minimized.
Business is situated at a declining stage.
QUESTION MARKS
High growth , Low market share
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Most businesses start of as question marks.
They will absorb great amounts of cash if the
market share remains unchanged, (low).
Why question marks?
Question marks have potential to become
star and eventually cash cow but can also
become a dog.
Investments should be high for question
marks.
ITC- TOBBACO
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CASH COW
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ITC is a leader in terms of
volume, of Rs. 11000 crores, 97
billion sticks cigarette market.
The segment is witnessing
stagnancy
with
volumes
declined in last three years.
In last five years, Rs. 1000
crore has been pumped into
the cigarettes business. Now,
additional Rs. 500 crores are
planned to be invested.
There is an inevitable shift of
consumers away from the
smoking habit.
In spite of dropping volumes,
ITC is able to maintain its
profitability
by
increasing
margins.
CASH FLOW
LIMITATIONS
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BCG MATRIX uses only two dimensions,
Relative market share and market growth
rate.
Problems of getting data on market share
and market growth.
High market share does not mean profits all
the time.
Business with low market share can be
profitable too.
ANSOFF’S MATRIX
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Selling more of an existing
product to an existing market.
This is going deeper into a
market so it is called market
penetration (More Promotion).
Selling an existing product in a
new market, for instance bringing
out different bottle sizes to attract
different buyers. This is called
market development.
Selling a new product to an
existing market. This is called
product development as it
means making changes to a
product, for instance a new
flavour like Coca-Cola Vanilla.
Selling a new product to a new
market.
This
is
called
diversification.
Coca-Cola
identified the need for a new
sports drink and launched
Powerade.
COCA COLA
Market Penetration Strategy
This focuses growth on the existing
product range by encouraging higher
levels of take-up of a service among the
existing target markets
Example: A supplier of fresh orange juice
encouraging its customers to drink orange
juice on occasions when they might
otherwise consume milk.
Market Development Strategy
This strategy
builds upon the
existing product
range, which an
organization has
established, but
seeks to find new
groups of
customers for it.
Product Development Strategy
An organization may choose to develop new products for
its existing markets.
Again referring to mobile phones, many companies have
developed innovative products to offer as additional
accessories to existing customers, including “hands-free”
car kits, traffic information services and on-line information
services.
NIVEA Visage Soft Facial Cleansing Wipes show product
development. Women who bought NIVEA skincare
products were looking for new ways to clean and care for
their skin.
READ
MARKETING INFORMATION SYSTEM (MIS)
PAGE NO. 63-66
MARKETING MANAGEMENT-A SOUTH ASIAN
PERSPECTIVE
THANK YOU