Today’s lesson
What are we learning today?
To learn why companies analyse their product portfolio in terms
of their actual and potential market share and market growth.
What companies do with the results of the analysis.
What I am looking for from you
To undertake a product portfolio analysis.
We are doing this because
It will help to develop your understanding of how companies
develop their products to meet their marketing objectives.
Slide 1
Starter – Product Portfolio Analysis
Group 1…Have a think about the Volkswagen
group…make a list of how many brands do they
have in their portfolio…Here is a starter for you.
Seat….Can you get all 7 of them?
And list as many products from ONE brand you
can think of.
Group 2…Can you think of a number of products
that have been established for a long time that
have a high market share but a low market
Slide 2
growth?
Volkswagen AG… Its brand portfolio
Slide 3
Volkswagen… Its product portfolio
FOX
POLO
GOLF
JETTA
10 basic model in 123
PASSAT
PHAETON
variants sold in the UK
alone as at June 2006!
BEETLE
TOUAREG
TOURAN
SHARAN
Slide 4
Boston Matrix – Product Portfolio Analysis
This is a method of ANALYSING THE MARKET
POSITION of a firm's existing products.
It can also help companies compare their
products market size and grow in comparison to
another company’s.
It is used TOGETHER WITH the PRODUCT LIFE
CYCLE as part of the marketing planning
process and ‘What do we do next?’
Slide 5
Boston Matrix – Product Portfolio
Analysis
High market
share %
High
market
growth
%
Rising Star
Low market
share %
Problem Child
Where would you place a DOG, a
CASH COW, a RISING
STAR and a
Cash Cow
Dog
PROBLEM CHILD
Low
market
growth
%
Slide 6
1975-82 1982-1990
1990-1998
Decline / Dog
Maturity & Saturation / Cash Cow
Growth / Rising Star
Introduction / Problem Child
Sales
Product Life Cycle – BMW 3 Series
1998-2006
Why do
BMW keep
releasing
another 3
series?
2006 ->
Slide 7
Boston Matrix – Product Portfolio Analysis
Low market
share %
High market
share %
High
market
growth
%
Rising Star
Excellent products
with high growth
and high market
share; but need
constant
advertising.
Cash Cow
Low
market
growth
%
Profits from Cash
Cows help fund
new products.
Sales made with
little investment.
Problem Child
Big investment to
develop and
advertise to start
with but it has big
sales potential for
the future.
Dog
Sales are falling
and it may be
taking profit to
keep the dog alive.
Slide 8
Cash Cows?
Can you think of a number of products that have
been established for a long time that have a high
market share but a low market growth?
Slide 9
Chocolate!!!
•Cadbury
http://www.cadbury.co.uk/EN/CTB2003/about_chocolate/
brand_stories/
•Mars
http://www.mars.com/The_Mars_Directory/index.asp
•Nestlé
http://www.nestle.co.uk/ProductNewsAndOffers/About
OurBrands/ConfectioneryAndCakes/Conf+Products++home.htm
These companies sell many brands of chocolates, in the UK and
abroad. In pairs, using the internet sites produce a list of all the
chocolate brands/products AND using the Boston Matrix place
these brands/products in Dogs, Rising Stars, Cash Cows or
problem children.
Slide 10
Cadbury, Mars & Nestlé
Cadbury
Mars
Nestlé
Cadbury's Dairy Milk
Mars bar
KitKat
Cadbury's Dairy Milk
extensions (e.g. Caramel,
mint, bubbly etc.)
M & Ms
Yorkie
Heroes
Crème Egg
Milk Tray
Roses
Snickers
Twix
Rolo
Walnut Whip
Smarties
Maltesers
Toffee Crisp
Milky Way
Crunch
Munchies
Caramac
Flake
Aero
Double Decker
Drifter
Picnic
Milky bar
Boost
Maveric
Dream
Lion bar
Dream extensions (e.g.
Dream with strawberries)
All Stars
After Eight
Dairy Milk
Slide 11