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57-58 Marketing Management: A South Asian Perspective .DEVELOP A MARKETING PLAN FOR A PRODUCT OF YOUR CHOICE. Refer to Sample Marketing Plan Page No.
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. RELATIVE MARKET SHARE (RMS) RMS = Business unit sales this year Leading rival sales this year . businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. measured either in revenue terms or unit volume terms. Market share is the percentage of the total market that is being serviced by your company.
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 = 16 = 0.59% 27 RMS = Business unit sales this year Leading rival sales this year .
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 .
high share •Produce cash •Produce cash Dogs Dogs • Low growth & share • Low growth & share • Low profit potential • Low profit potential Low 8 .Analyzing Current SBU’s: Boston Consulting Group Approach Relative Market Share Market Growth Rate High High Stars • High growth & share • Profit potential • May need heavy investment to grow Low Question Marks Question Marks • High growth. low share • High growth. high share • Low growth. low share • Build into Stars or phase out • Build into Stars or phase out • Require cash to hold • Require cash to hold market share market share ? Cash Cows Cash Cows • Low growth.
They also require heavy investment. Attempts should be made to hold the market share otherwise the star will become a CASH COW.STARS High growth. . to maintain its large market share. High market share Stars are leaders in business.
CASH COWS Low growth . They generate more cash than required. They extract the profits by investing as little cash as possible . High market share They are foundation of the company and often the stars of yesterday.
Low market share Dogs are the cash traps.DOGS Low growth. . Business is situated at a declining stage. Dogs do not have potential to bring in much cash. Number of dogs in the company should be minimized.
Investments should be high for question marks.QUESTION MARKS High growth . Low market share Most businesses start of as question marks. . Why question marks? Question marks have potential to become star and eventually cash cow but can also become a dog.
. additional Rs. 1000 crore has been pumped into the cigarettes business.TOBBACO CASH COW ITC is a leader in terms of volume.ITC. The segment is witnessing stagnancy with volumes declined in last three years. There is an inevitable shift of consumers away from the smoking habit. 500 crores are planned to be invested. Rs. of Rs. 11000 crores. 97 billion sticks cigarette market. ITC is able to maintain its profitability by increasing margins. In spite of dropping volumes. Now. In last five years.
ANSOFF’S MATRIX .
Selling a new product to a new market. Selling an existing product to a new market. Selling more of an existing product to an existing market. diet coke being targeted at people who are health conscious. This is called diversification. This is called market development. Ex. for instance a new flavour like Coca-Cola Vanilla. COCA COLA . This is going deeper into a market so it is called market penetration (More Promotion). This is called product development as it means making changes to a product. Selling a new product to an existing market.
.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. but seeks to find new groups of customers for it. which an organization has established. .
including “hands-free” car kits. Women who bought NIVEA skincare products were looking for new ways to clean and care for their skin. traffic information services and on-line information services. NIVEA Visage Soft Facial Cleansing Wipes show product development.Product Development An organization Strategymay 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.
63-66 MARKETING MANAGEMENT-A SOUTH ASIAN PERSPECTIVE .READ MARKETING INFORMATION SYSTEM (MIS) PAGE NO.
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