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MB0030 MM Complete
MB0030 MM Complete
Roll No.
Program MBA – Lateral Entry
Code MB 0030
Set 1 MB0030
This model is used to identify company’s SBU’s position in the market.
This model identifies the SBU’s strengths weaknesses, opportunities and
threats on the basis of market growth rate and relative market share.
This model is also known as growth share matrix.
The origin of the Boston Matrix lies with the Boston Consulting Group in
the early 1970s. It was devised as a clear and simple method for helping
corporations decide which parts of their business they should allocate
their available cash to. Today, this is as important as ever because of the
limited availability of credit.
However, the Boston Matrix is also a good tool for thinking about where
to apply other finite resources: people, time and equipment.
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. The higher your market share, the higher proportion of the market
you control.
The Boston Matrix assumes that if you enjoy a high market share you will
normally be making money (this assumption is based on the idea that you
will have been in the market long enough to have learned how to be
profitable, and will be enjoying scale economies that give you an
advantage).
The question it asks is, "Should you be investing your resources into that
product line just because it is making you money?" The answer is, "not
necessarily."
This is where market growth comes into play. Market growth is used as a
measure of a market's attractiveness. Markets experiencing high growth
are ones where the total market is expanding, which should provide the
opportunity for businesses to make more money, even if their market
share remains stable.
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Axis components:
a. Market Growth rate: the rate at which market is growing.
b. Relative Market Share: market share of the SBU dived by the
market share of the largest competitor.
Model Components:
Dogs:
Low Market Share / Low Market Growth.
In these areas, SBU’s market presence is weak, so it's going to take a lot
of hard work to get noticed. Also, you won't enjoy the scale economies of
the larger players, so it's going to be difficult to make a profit.
Cash Cows:
High Market Share / Low Market Growth
Here, SBU’s are well-established, so it's easy to get attention and exploit
new opportunities. However it's only worth expending a certain amount of
effort, because the market isn't growing and your opportunities are
limited.here we can say cash cow can be milked.
Stars:
High Market Share / High Market Growth
Here SBU’s are well-established, and growth is exciting! These are
fantastic opportunities, and you should work hard to realize them.
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Question Marks (Problem Child):
Low Market Share / High Market Growth
These are the opportunities no one knows what to do with. They aren't
generating much revenue right now because you don't have a large
market share. But, they are in high growth markets so the potential to
make money is there. Here there are two choices, either to invest heavily
to bring it to star position or divest or liquidate from that position.
Question Marks might become Stars and eventual Cash Cows, but they
could just as easily absorb effort with little return. These opportunities
need serious thought as to whether increased investment is warranted.
Key Points
The Boston Matrix is an effective tool for quickly assessing the options
open to you, both on a corporate and personal basis.
Limitations:
As any other marketing theories in the field, the BCG matrix model is not
perfect either. There are according problems of this theory.
Some limitations concerning the particular use of BCG include:
1. Only two dimensions – market share and product or service growth
rate, are employed. These are the first limitations.
2. How to define market and how to get data about market share are also
problems.
3. High market shares don’t always necessarily lead to profit at all times.
It is not the only success factor.
4. Low share or niche businesses can be profitable too, which means in
the real world some Dogs can be more profitable than cash Cows.
5. The model cannot reflect the growth rates of the general market and
market growth is not the only indicator for market attractiveness.
6. The model also neglects the effects of synergy between different
business units.
PepsiCo is one of the world’s largest food and beverage companies with
annual turnover of $44 billion [2008]. The company employs
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approximately 185000 people worldwide, and its products are sold in
approximately 200countries through 4 Ps of marketing mix which are
following.
1. Product
2. Promotion
3. Place
4. Price
1. Pepsi Products:
Quality:
Pepsi follows on Quality standard across the globe.
Pepsi has a long standing commitment to protecting the consumers whose
trust and confidence in its products is the backbone of its success. In
order to ensure that consumers stay informed about the global quality of
all Pepsi products sold in world, Pepsi products carry a quality assurance
seal on them.
“One Quality Worldwide” assurance seal appears on the entire range of
Pepsi’s beverages.
The composition of the soft drink is as follows:
Water (86-90%), Sugar (10-13%), CO2 (0.3 -0.7%) and Concentrate
(0.2-0.4%).
- Water used in Pepsi Co soft drinks must be as safe as possible for
human consumption. At every plant , Pepsi require incoming water
to be purified even further, using a variety of processes. At
minimum, every plant in world employs a dual back to back carbon
filter.
- Sugar must meet the standards of quality of Pepsi, which are
uniform for all plants across world. All Pepsi sugar manufacturers
should undergo the same supplier qualification process. All plants in
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the world further purify sugar with hot activated carbon anf fine
filtration.
- The Co2 in each bottle of Pepsi surpasses the recognised standards
for medical use. Each supplier undergo rigorous qualification
process, which includes the complete audit of refineries and testing
from international laboratories. Each batch carries certificate of
analysis and compliance.
- Concentrates which makes up less than 1 % of Pepsi finished
beverages, also are diligently controlled. All ingredients including
flavours, emulsifiers, preservatives, colours, sweeteners are of food
grade and approved by global standards like JECFA/CODEX etc.
Design:
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2. Pepsi promotion:
3. Pepsi Place:
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4. Pepsi Price:
Micro Environment
Supplier :
Marketing Intermediaries:
The***** was set up in **** and is the selling agent for Pepsi in south
India, it is based in the *****. It manages the supply of several
wholesalers, retailers, restaurants, hotels and other such food outlets.In
order to acieve the projected sales targets effectively, the organisation
ensures a comprehensive strategic alignment with the overall Pepsi’s
business strategy.
Customers:
Pepsi cutomers are mostly of youg generation between age 14 and 30
years.
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Competitors:
Coca-Cola is the main competitor in India.
Publics:
There are lots of public are included such as channels, investment houses,
radio stations, news papers community groups, general public etc. And
also internal public include workers, board of directors, managers and so
on.
Macro Environment:
Demographic forces:
Age:
The age of potential customers is around 14 to 30years.
Income:
As far as income levels are concerned, Pepsi targets mainly middle
class to the upper class.
Economic Forces:
When the economy of the consumer becomes low and expenses become
high, consumers move towards another product which is of lower cost
than the PepsiCo product.
Natural forces:
Due to any earthquake, or disaster shortage of product will be there by
marketers or suppliers, so this affects the product and market.
Technology Forces:
There is huge investment from the government to develop the
infrastructure opportunities and the creation of the new product such as
new advanced formulas, changes in technology of production this affects
the product.
Political and legal:
India is politically stable and hence economy is stable and as a result it
attracts investments from other countries. This increases other beverages
companies to enter Indian market and this in turn affects the Pepsi
products.
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Cultural forces:
Majority of Indians are non vegetarians and they expect the beverages
they consume must be free from all insects. Hence even if a small insect
is found in an Pepsi product in any part of India by a customer, this
affects the business of Pepsi in whole country.
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o Strivers: Strivers earn between Rs500000 and Rs1000000.
They are considered very successful. The group contains
business people, large farmers, senior government officials
and professionals. They are leading the consumption lead
India growth.
o Global Indians: They are earning more than Rs.1000000.
this group is comprised of senior officials, professionals, and
top business executives. India is witnessing growth in this
class.
b. Social factors:
Human beings are social animals. They live and interact with other
people. Therefore there is a chance of influence by others on their
opinions. Marketers identify such influential persons or groups of
consumer. Generally such groups are classified into two major groups
namely reference groups and family.
Reference Groups are used in order to evaluate and determine the
nature of given individual or other group’s characteristics and social
attributes. Reference groups are those that people refer to when
evaluating their own qualities, circumstances, attitudes, values and
behaviours.
Family: Indian culture gives utmost importance to the family. People
discuss with their family before purchasing the valuable items.
Therefore many companies use either whole family or kids in their
promotional programs.
For example Godrej introduced memory backup auto washing machine.
They have shown family enjoying without any problems of washing
clothes.
c. Personal Factors:
Individual factors like age, occupation, lifestyle and personality
influence the consumer decision making. Personality is the image of
personal traits. Traits includes self confidence, dominance, autonomy,
defensiveness, adaptability and aggressiveness. Many companies use
this concepts in their marketing communications. Bajaj pulsar used
muscularity to highlight its image(definitely male).
d. Psychological factors:
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ii. Security or safety:
These are the needs to be free of physical danger and of the fear
of losing job, property, food, shelter. It laso includes protection
against emotional harm.
iii. Social needs:
People will try to satisfy their needs for affection, acceptance and
friendship.
iv. Esteem needs:
Once the people are satisfied with social needs, they would like
to have esteem needs like power, prestige, status, self-
confidence, self respect, achievements recognition and attention.
v. Needs for self actualisation:
Highest need in this hierarchy of needs. It is the drive to become
what one is capable of becoming. It includes growth, achieving
one’s potential and self fulfilment.
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Deodorising ability √ √ √
Water dispenser X X √
√ √ √
From the above table it is clear that marketer should first develop the
belief about the brand, provide the information and differentiate
company brand from others.
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market coverage strategy for the all the three
companies.
Company A:
Company B:
Company C:
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Given the comparison of different coverage strategies, it is easy to locate
the strategies for companies A, B and C.
Given the above table, the firm’s resources and the products requirement
in its present form would decide the choice of a particular market-
coverage strategy. Finally the competitor’s adoption of a particular
strategy should be considered for deciding company’s own strategy.
a. Attribute Positioning:
b. Benefit Positioning:
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Baseline:
The simplest car to drive (Positioning)
d. User positioning:
Positioning the product as best for some user group. For example in
Parle-G, the booy was positioned as rock star. This advertisement
basically targets kids and boys.
e. Competitor Positioning:
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