1. What is a good strategy?

The key is developing a marketing strategy that forms a solid foundation for your promotional efforts. Implementing promotional activities such
as advertising, direct mail or even networking and one-to-one sales efforts without a marketing strategy is like buying curtains for a house you
are building before you have an architectural plan. How would you even know how many curtains to buy or what size they needed to be?

You can develop a strong marketing foundation by:

1. Defining your product or service: How is your product or service packaged? What is it that your customers are really buying? You may be
selling web-based software tools but your clients are buying increased productivity, improved efficiency and cost savings. And if you offer several
products or services which ones are the most viable to promote?

2. Identifying your target market: Everyone or anybody might be potential clients for your product. However, you probably don’t have the time
or money to market to Everyone or Anybody. Who is your ideal customer? Who does it make sense for you to spend your time and money
promoting your service to? You might define your ideal customer in terms of income, age, geographic area, number of employees, revenues,
industry, etc. For example a massage therapist might decide her target market is women with household incomes of $75,000 or more who live in
the Uptown area.

3. Knowing your competition: Even if there are no direct competitors for your service, there is always competition of some kind. Something
besides your product is competing for the potential client’s money. What is it and why should the potential customer spend his or her money with
you instead? What is your competitive advantage or unique selling proposition?

4. Finding a niche: Is there a market segment that is not currently being served or is not being served well? A niche strategy allows you to focus
your marketing efforts and dominate your market, even if you are a small player.

5. Developing awareness: It is difficult for a potential client to buy your product or service if they don’t even know or remember it exists.
Generally a potential customer will have to be exposed to your product 5 to 15 times before they are likely to think of your product when the
need arises. Needs often arise unexpectedly. You must stay in front of your clients consistently if they are going to remember your product when
that need arises.

6. Building credibility: Not only must clients be aware of your product or service, they also must have a positive disposition toward it. Potential
customers must trust that you will deliver what you say you will. Often, especially with large or risky purchases, you need to give them the
opportunity to “sample”, “touch”, or “taste” the product in some way. For example, a trainer might gain credibility and allow potential customers to
“sample” their product by offering free, hour long presentations on topics related to their area of specialty.

7. Being Consistent: Be consistent in every way and in everything you do. This includes the look of your collateral materials, the message you
deliver, the level of customer service, and the quality of the product. Being consistent is more important than having the “best” product. This in
part is the reason for the success of chains. Whether you’re going to Little Rock, Arkansas or New York City, if you reserve a room at a
Courtyard Marriott you know exactly what you’re going to get.

8. Maintaining Focus: Focus allows for more effective utilization of the scarce resources of time and money. Your promotional budget will bring
you greater return if you use it to promote a single product to a narrowly defined target market and if you promote that same product to that
same target market over a continuous period of time.

2. List differences between a corporate strategy and business strategy.
• Business-level strategies deal with a particular business unit while corporate strategies deal with the entire company, which
may consist of several business units.
• Business-level strategies deal with specific issues, such as determining the price of the products, increasing sales or
introducing a new product.
• Corporate strategies tend to be very broad and are focused on gaining a competitive advantage in the industry.
• In most cases, corporate and business-level strategies tend to operate independent of each other
• Corporate strategies will often affect business-level strategies. This is mainly done by allocating specific resources to
particular business units.

don’t be too concerned about elaborating at first. Value Chain Analysis helps you identify the ways in which you create value for your customers. listing the factors in each category in order from highest priority at the top to lowest priority at the bottom. 3. 4. This is easy to see in manufacturing. In business.Now. A SWOT analysis is typically conducted using a four-square SWOT analysis template. paper). Once you are finished brainstorming. Use the method that makes it easiest for you to organize and understand the results. and then meet to discuss and compile the results. equipment. and the more they will keep on buying from you. if you add a lot of value to your team. and systems to create services of real value to the person being served – the customeAnd remember that your customers aren't necessarily outside your organization: they can be your bosses. wood pulp) and converting it into something that people are prepared to pay money for (e. great services. bullet points may be the best way to begin. where the manufacturer "adds value" by taking a raw material of little use to the end user (for example.g. your coworkers. positive factors) Strengths describe the positive attributes. I recommend holding a brainstorming session to identify the factors in each of the four categories. They are within your control. What is Value chain analysis? Why is it used? Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. prioritized version of your SWOT analysis. Strengths (internal. create a final. but you could also just make a lists for each category.  What do you do well? . or the people who depend on you for what you do. You should then expect to be rewarded in line with your contribution. As you work through each category. Alternatively. or jobs well done. On a personal level.So how do you find out where you. we're paid to take raw inputs. you could ask team members to individually complete our free SWOT analysis template. internal to your organization. Just capture the factors you believe are relevant in each of the four areas. you will excel in what you do. and then helps you think through how you can maximize this value: whether through superb products. But this idea is just as important in service industries. your team or your company can create value? This is where the "Value Chain Analysis" tool is useful. the more value you create. tangible and intangible. the more people will be prepared to pay a good price for your product or service. and to "add value" to them by turning them into something of worth to other people. knowledge. where people use inputs of time.• Business-level strategies are very useful for solving practical problems while corporate strategies are useful for developing long-term solutions for problems. Explain SWOT analysis. this is really important: in most cases.

 What advantages do you have over your competition?  Do you have strong research and development capabilities? Manufacturing facilities?  What other positive aspects. What internal resources do you have? Think about the following: o Positive attributes of people. background. internal to your business.  What factors that are within your control detract from your ability to obtain or maintain a competitive edge?  What areas need improvement to accomplish your objectives or compete with your strongest competitor?  What does your business lack (for example. or technology. such as capital. or skills. credit. negative factors) . reputation.  What opportunities exist in your market or the environment that you can benefit from?  Is the perception of your business positive?  Has there been recent market growth or have there been other changes in the market the create an opportunity?  Is the opportunity ongoing. You need to enhance these areas in order to compete with your best competitor. add value or offer you a competitive advantage? Weaknesses (internal. network. credentials. such as knowledge. or is there just a window for it? In other words. existing customers or distribution channels. expertise or access to skills or technology)?  Does your business have limited resources?  Is your business in a poor location? Opportunities (external. education. negative factors) Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. positive factors) Opportunities are external attractive factors that represent reasons your business is likely to prosper. o Tangible assets of the company. patents. how critical is your timing? Threats (external.

Economy pricing: no-frills price. Margins are wafer thin. local tea producers. Example: Mobile phone rates in India. What is meant by Pricing Strategy? A pricing strategy takes into account segments. research and understanding and risk taking ability. Example: the earliest prices for mobile phones. Definition: Price is the value that is put to a product or service and is the result of a complex set of calculations. Targets the mass market and high market share. housing loans etc. You have no control over these. A pricing strategy takes into account segments. the economy. Example: Friendly wash detergents. or the business itself. equipment. 6. competitor actions. Nirma. This is done when a new product is being launched. amongst others. amongst others. ability to pay. market conditions.  Who are your existing or potential competitors?  What factors beyond your control could place your business at risk?  Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?  What situations might threaten your marketing efforts?  Has there been a significant change in supplier prices or the availability of raw materials?  What about shifts in consumer behavior. market conditions. VCRs and other electronic items where a few players ruled attracted lower cost Asian players. Example: Porche in cars and Gillette in blades. It is understood that prices will be raised once the promotion period is over and market share objectives are achieved. ability to pay. at risk. Such pricing strategies work in segments and industries where a strong competitive advantage exists for the company. Skimming strategy: high price is charged for a product till such time as competitors allow after which prices can be dropped. trade margins and input costs. competitor actions. . or government regulations that could reduce your sales?  Has a new product or technology been introduced that makes your products. It is targeted at the defined customers and against competitors. or services obsolete? 5. trade margins and input costs. overheads like marketing and advertising costs are very low. Analyze Porter's five forces regulating Industry attractiveness. Description: There are several pricing strategies: Premium pricing: high price is used as a defining criterion. The idea is to recover maximum money before the product or segment attracts more competitors who will lower profits for all concerned. but you may benefit by having contingency plans to address them if they should occur. Penetration pricing: price is set artificially low to gain market share quickly.Threats include external factors beyond your control that could place your strategy.

Threat of new entrants. and the supply purchase cost relative to substitutes. The easier it is for a competitor to join the marketplace. regulated or unregulated. "If the forces are benign. Consumers have power when there aren't many of them. the five forces that shape industry competition are: Competitive rivalry. almost no company earns attractive returns on investment. and hotels. In that light. would lower a business's profitability. When rivalry competition is high.According to Porter. the presence of available substitutes. as they are in industries such as software." Understanding the Five Forces Porter regarded understanding both the competitive forces and the overall industry structure as crucial for effective strategic decision-making. as they are in such industries as airlines. In Porter's model. This force analyzes how much power a business's supplier has and how much control it has over the potential to raise its prices. advertising and price wars can ensue. high-tech or low-tech. Rivalry is quantitatively measured by the Concentration Ratio (CR). Businesses are in a better position when there are a multitude of suppliers. This force examines how intense the competition currently is in the marketplace. textiles. soft drinks. many companies are profitable. it looks at the number of suppliers available: The fewer there are." Porter wrote. Bargaining power of customers. as well as when it is easy to switch from one business's products or services to another. the greater the risk of a business's market share being depleted. and toiletries. which is determined by the number of existing competitors and what each is capable of doing. Rivalry competition is high when there are just a few businesses equally selling a product or service. in turn. This force examines how easy or difficult it is for competitors to join the marketplace in the industry being examined. industry structure is what ultimately drives competition and profitability —not whether an industry produces a product or service. which is the percentage of market share owned by the four largest firms in an industry. Bargaining power of suppliers. which can hurt a business's bottom line. when the industry is growing and when consumers can easily switch to a competitors offering for little cost. but lots of sellers. the origin of profitability is identical regardless of industry. "If the forces are intense. the more power they have. is emerging or mature. Sources of supplier power also include the switching costs of firms in the industry. Barriers to . which. This force looks at the power of the consumer to affect pricing and quality. Buying power is low when consumers purchase products in small amounts and the seller's product is very different from any of its competitors. In addition.

You can now choose websites. New Focus Not all segments are divided to suit pre-existing products. magazines. If a company can spot this segment early. The threat of substitutes are informed by switching costs. unwieldy market and segment it into manageable pieces. Simply put. Apple probably does not market the 5C during the O’Reilly Factor. advertising is going to be both easier and more effective. which would determine if they have the ability to lower their costs even more. Threat of substitute products or services. It looks at how many competitors there are. from designing a new product to creating a marketing objective to complement it. both immediate and long-term. Of course. as well as a buyer's inclination to change. how their prices and quality compare to the business being examined and how much of a profit those competitors are earning. Food and beverage companies are almost unanimously focusing on healthy alternatives to preexisting products. Benefit #2: New Segment. In this way. lasting and proven to be profitable. For example.entry include absolute cost advantages. What are the benefits of Market Segmentation? Benefit #1: More Efficient Advertising This is the most obvious benefit. Join this Market Research Classroom to learn how to analyze and tap into the most lucrative markets. Benefit #3: Concentrated Distribution . narrower focus. This force studies how easy it is for consumers to switch from a business's product or service to that of a competitor. etc. a company’s entire strategy. When you segment a market. that are tailored to each market. they merely shifted their focus in the hopes of better returns. Read this blog post on advertising strategies to learn how to promote your product or service . Vital to the success of a new focus is ensuring that the focus is legitimate. these companies did not all of a sudden change their minds about what kinds of products they pride themselves on. economies of scale and wellrecognized brands. 7. Much of the time the product is reimagined to fit a new market segment. segmenting the market makes it easier to advertise to your target audience. TV stations. If you take a large. then it can alter its focus for more effective results. you simultaneously segment marketing options. is based on a new segment and new. access to inputs.

price. So instead of selling all ranges of quality under one name. you are able to increase distribution. you can’t . he uses “Marc by Marc Jacobs” to sell to those in the middle. But if you devised an intelligent plan. you can hit the nail on the head when it comes to branding. If you know anything about fashion. fashionistas will see the “Marc Jacobs” line as a status symbol. Marc Jacobs segments the market and this allows him to have very precise branding. he uses “Jacobs by Marc by Marc Jacobs” (this is getting ridiculous. It might seem counter-intuitive that when your decrease market size by segmenting it. increases in sales are more than possible with market segmentation. Not only does he not tarnish his name by releasing a cheaper line under the name “Marc. And once you’ve established yourself as a leader in your segmented market. Every aspect of your company and its products can be tailored to meet the customers’ demands: design. If that’s your objective. so do your channels of distribution. Yes. Less. It’s inevitable. Learn how to brand yourself like Marc Jacobs with this big brand strategy course for small brands. you will begin stealing customers from the competition. Benefit #5: Increase In Sales This is the one we’ve all been waiting for. you can eliminate ineffective distribution channels and use these new.When your focus narrows. immediate sales may drop. quality. Jacobs is that he preserves the pristine quality associated with his name by having just his name represent the highest product line. Benefit #4: Precise Branding Once the market is segmented. how it this possible when you also must decrease the overall number of distribution channels? The idea is that once you figure out the high-density areas of customer interest. What’s genius about Mr. freed-up resources to pump those outlets that receive the greatest amount of traffic. those who want a designer brand but cannot regularly afford the cost. and therefore must have it. Marc Jacobs uses his “Marc Jacobs” brand to sell those who can afford the best. but more powerful. you will soon boost sales in your target audience thanks to many of the benefits listed above.” he creates competition within his company. right?) to sell to just about anyone who desires a designer name. customer service. but there is one thing to consider first: you are bound to lose some customers when you narrow your boundaries. Further. For this reason. Get free brand advice from this article on brand visibility and attracting your exact target audience. etc. you know that a lot of the high-end designers have several brands. distribution channels is a beautiful thing. finally.

By so doing. because pretty much everyone wants to use a product marketed to the young and cool). DC Shoe company will forever (or just about) be associated with the youth skateboarding/snowboarding movement. Hubspot. it then becomes associated primarily through sport and quality. not the venture c. Samsung has accomplished just that by beating Apple at its own game. customer retention is achieved through increasing competitiveness. First. 8. he has created a product for just about anyone. there is no reason for someone to “grow up” and out of the brand. Mr. mid-range. you can use this tactical guide to customer development for entrepreneurs to establish. once this professional has attained some degree of success. Have no computer-based spreadsheet d. Jacobs has segmented the market into three primary categories: affordable. Brand loyalty directly results from association. increasing) your focus. Focus on the opportunity. As we know.a. Compared to a business plan. and high-end. Be the basis to make the decision on whether to act on an opportunity or wait until another. and retain. Salesforce. it should: a. and in retrospect it never should have adopted an all-encompassing marketing strategy. Be shorter b.k. you are making yourself more competitive by narrowing (a. a commercial advantage through market segmentation. Down the road. Not happening. and others . Mark Jacobs has a product not only for every person. Samsung has taken over the smartphone market (this is what Apple did initially. he or she might opt for the mid-range or high-end option. A young professional who is just getting started might be able to purchase one of his affordable items. but for every stage of life (although you are less likely to see someone “fall from grace” and go from buying high-end Marc Jacobs to “Jacobs by Marc by Marc Jacobs”). better opportunity comes along It should include: . by marketing heavily to young and cool customers. let’s look at the Marc Jacobs fashion example again. This is class movement right before our eyes. Benefit #6: Customer Retention Customer retention is accomplished in two ways.miss this “sales hacking” introduction with advice from CEOs and VPs from Google. Second. Adobe. Because DC makes quality products. Even if customer retention has never been your forte. That is. What is Opportunity Assessment? An opportunity assessment plan is NOT a business plan.

offering reports like Standard & Poors or IBISWorld. If you cannot self-finance. a. How many new firms have entered this industry in the past three years? k. Your local library is a great place to start. Examine each critical step.) 3. What are total industry sales over the past five years? i. How much time and how much money will each step require? d. What are the competitive companies in this product market space? Describe their competitive behavior. What is the mission of the new venture? e. List components of a Marketing Plan. What is the market need for the product or service? ii. What does international competition look like? h. In addition. Identify consumer buying habits in the industry. Why will this opportunity sustain you once the initial excitement subsides? d. What new products have been recently introduced in this industry? l. A language tutoring business might target both students and foreign-born employees who want to improve their English. market size. Where is the money to be made in this activity? (The activity that interests you most may be just off center from where the money to be made from this opportunity will be located. What are the NAIC and SIC codes for this product or service? d. What competitive products are available filling this need? iv. Why will you be successful in this venture? 4. What market need does it fill? b. What experience do you have and/or will you need to successfully implement the business plan? f. b. An assessment of the opportunity: a. c. Then think about the sequence of activity and put these critical steps into some expected sequential order. Here are the essential components of a marketing plan that keeps the sales pipeline full. What are the specific aspects of the product or service (include any copyright. What needs to be done to translate this opportunity into a viable venture? a. A well-designed target market description identifies your most likely buyers. What are the strengths and weaknesses of each of your competitors? b. What is the profile of your customers? m. and any current trends. How does it fit into your background and experience? e. What are the unique selling propositions of this product or service? c.1. A description of the product or service i. Why does this opportunity excite you? b. 1. What patents might be available to fulfill this need? 2. Target market. Entrepreneurial self-assessment and the entrepreneurial team: a. What is anticipated growth in this industry? j. What does the international market look like? g. 2. you should discuss at least two or three levels of segmentation. . Research is the backbone of the marketing plan. patent or trademark information)? iii. Some library cards even allow access to online services from home. What market research data can be marshaled to describe this market need? f. What development work has been completed to date? f. What is the size and past trends of this market? c. What are your reasons for going into business? c. What is the future growth and characteristics of this market? d. market growth or decline. Market research. where would you get the needed capital? 9. What social condition underlines this market need? e.

6. and what segment of the market are they aiming to reach? Knowing the ins and outs of your competitors will help you better position your business and stand out from the competition. 4. establish a metric that tells you to stop if it’s not generating sufficient return on investment (ROI). What is the perception of your brand in the marketplace? For example. 10. 5. it becomes more difficult as the market matures and competition increases. couponing. The obvious step is to increase advertising or add more sales people to increase sales. Repeat any programs that are delivering sales or sign-ups to your email list. Market Penetration Market penetration is the easiest way to grow in an expanding market. He outlines four distinct strategies: . What is the price point at which your competitors are selling. Your marketing strategy is your path to sales goals. webinars. Here is a straightforward description of four different growth strategies and an explanation of how to determine which is best for your business. Budget. seminars. Positioning. However. content strategy. street teams. Metrics. Why is ANSOFF's matrix used? Explain the Matrix. Alternatively. For each activity. and get rid of anything that’s not. Igor Ansoff suggested that business owners’ ability to grow their businesses comes down to how they market new or existing products in new or existing markets. business owners can evaluate each of the growth strategies in turn to assess which is likely to result in the best possible return. and evaluate the results. Track your marketing success with Google Analytics for website conversions and a simple Excel sheet to compare your budget against the actual ROI.3. It should look at the entire marketplace and then break down specific tactics including such as events. Develop compelling branding and marketing messages that clearly communicate how you want to be perceived. Ask yourself “How will I find and attract my most likely buyers?” This is the core of what the strategy should explain. 7. do customers see you as the place to go for gluten-free or healthy options or the place to go if you’ve got an appetite for a double cheeseburger? The difference in how the target market sees you is your positioning. business owners can win business from competitors through competitive . email. partnerships. You need to know who your competitors are and how your products and services are different. Also include a “red light” decision point. if your restaurant sells burgers. social media. Market strategy.to 60-day period. Develop a month-by-month schedule of what you plan to spend on marketing. direct mail. Every business owner wants to grow their business but it is often difficult to determine the best way forward. Test programs over the course of a 30.Market Development – selling more of the same things to different customers .Product Development – selling new products or services to the same customers .Diversification – selling new products or services to different customers Using Ansoff’s matrix.Market Penetration – selling more of the same things to more of the same customers . and other activities that will help you gain access to customers. Competitive analysis.

wealth management advice. sensitive properties. discounting. But markets can also be developed through more traditional means such as developing a strategic partnership with a business that already operates in the target market. for example. The more progressive accountancy practices now offer business advice. In a similar way. But market penetration can also be increased by initiatives that increase usage. and service based businesses can add products to increase sales. for example equipment suppliers can add maintenance and repair services. Many businesses have adopted the franchise model to access new geographical markets. Finally. New geographical markets can be developed by setting up shops. The business growth strategy may be to target larger offices. succession planning and many other services in addition to traditional accounting and audit activities. the more toothpaste we use. The most obvious example is to move online and use the Internet to promote and sell products. Manufacturers have repositioned concentrated drinks such as MiWadi to appeal to the health-conscious adult market by promoting it as a flavour to add to the recommended daily water consumption. Manufacturers of snack foods that are considered “bad for you” have introduced fat free or low fat versions to counter a trend towards reduced consumption. market penetration can be increased by developing new applications. at how toothpaste manufacturers increased usage by introducing pump-action toothpaste dispensers that dispense a fixed quantity of toothpaste. so the bigger the toothbrush head. many traditional printers have expanded to offer office stationery and office furniture. tax consultancy. small and medium enterprises and eventually large multinational companies. Look at how breakfast cereal makers also promote their products as bedtime snacks. A good example is a business providing IT support to small office/home office users. . Manufacturers of health yogurts emphasise the importance of daily consumption. vouchers or other offers. bonuses or other reward schemes or by introducing customer loyalty schemes. It is often most appropriate where the strength of the business lies in its relationship with customers. A good example is an accountancy practice. Product Development Developing new products for an existing market is also more risky than market penetration.pricing. so the most effective means to grow the business is to develop new products for the existing client base. An interesting alternative is to develop new markets by finding alternative uses for existing products. One way to develop the market is to introduce new sales and distribution channels. Business owners can also boost sales by providing additional incentives to sales staff through commissions. Johnson and Johnson repositioned baby shampoo to appeal to the female market by emphasising its gentle. Client retention is high and clients are unlikely to be attracted away from other practices. Market Development Market development is a riskier strategy and is most appropriate where the core competence of the business is the product or service. Many product based businesses can add complementary services. warehouses or offices in the target areas. Look. Research has also shown that the size of the toothbrush head influences the amount of toothpaste used.

a market share or cash generation is written. 11. . and "dogs" are placed on the right. One large square is drawn and is divided into four equal quadrants. and a growth rate or cash use is written down the left side. gyms. high cash use is at the top and low cash use or growth rate is at the bottom. On the top left is high market share. while question marks have low market share and a high growth rate. Diversification Diversification is the most risky strategy since it involves two unknowns: new products with unknown development problems and new markets with unknown characteristics. The most common way for a business to diversify is to develop new products that take advantage of the core competencies of the organisation. To create a BCG matrix. Alternatively.An alternative growth strategy is to start to carry out activities further back up the supply chain. car rental. Explain BCG Matrix. and how EasyJet have diversified into hotels. "cash cows" go on the left. On the left-hand side. foods etc. "stars" go in the upper-left quadrant. Along the top of the box. At the bottom. wholesaling or even importing activities that increase the scale of the business while maintaining the same customer base. The diagram visually shows that stars have high market share and a high growth rate. and "question marks" are put in the upperright square. and dogs have a low market share and a low growth rate. But it can offer the best potential for growth. Within the diagram. businesses gather market-share and growth-rate data on their business units or products. fastfood and a wide range of other goods and services. On the bottom. a business can diversify by acquiring another business that operates in a separate market. cash cows have a low growth rate but a high market share. so distributors may add warehousing. offices. and low market share is on the left. Examples include how Richard Branson has taken advantage of the Virgin brand and diversified into entertainment. air and rail travel.

. to service the corporate debt. and to pay dividends to shareholders. According to NetMBA. Monopolies and first-to-market products are frequently termed stars. However. This generally results in the same amount of money coming in that is going out. Companies are advised to invest in cash cows to maintain the current level of productivity. Stars can eventually become cash cows if they sustain their success until a time when the market growth rate declines. because of their high growth rate. Cash cows: Cash cows are the leaders in the marketplace and generate more cash than they consume. These are business units or products that have a high market share. cash cows provide the cash required to turn question marks into market leaders. to fund research and development.The following ideas apply to each quadrant of the matrix: Stars: The business units or products that have the best market share and generate the most cash are considered stars. Companies are advised to invest in stars. to cover the administrative costs of the company. or to "milk" the gains passively. but low growth prospects. stars also consume large amounts of cash.

They are consuming a lot of cash but are bringing little in return.Dogs: Also known as pets. These business units are prime candidates for divestiture. Explain the different stages of Product Life cycle. However. The payoff from growth must come when the growth slows. explain how elements of marketing mix differ from one stage to another. Henderson wrote that four rules are responsible for product cash flow:  Margins and cash generated are a function of market share. Question marks: These parts of a business have high growth prospects but a low market share. dogs are units or products that have both a low market share and a low growth rate. question marks. companies should be mindful of the sources of cash flow. it can begin to further analyze its products'potential. they do have the potential to turn into stars. or to sell if it does not. The value of a product is completely dependent upon obtaining a leading share of its market before the growth slows. since these business units are growing rapidly. . or it never will. In the end. even though they are bringing back basically nothing in return. The payoff is cash that cannot be reinvested in that product.  No product market can grow indefinitely. Understanding cash flow To understand the elements of the Boston matrix.They frequently break even. 12. neither earning nor consuming a great deal of cash. also known as problem children. lose money. As BCG founder Bruce Henderson wrote in 1968. Dogs are generally considered cash traps because businesses have money tied up in them. The added cash required to hold share is a function of growth rates." Once a company plots out its matrix. "all products eventually become either cash cows or pets [dogs].  Growth requires cash input to finance added assets. Also. Companies are advised to invest in question marks if the product has potential for growth. Buying market share requires an additional increment or investment. High margins and high market share go together.  High market share must be earned or bought.

They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage. we buy millions of products every year.e. the product is established and the aim for the manufacturer is now to maintain the market share they have built up. 13. the market for a product will start to shrink. the cost of things like research and development. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. and because the company can start to benefit from economies of scale in production. On the other hand. long-established products eventually become less popular. although they will be increasing. Decline Stage – Eventually. it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets. explain Why is it important to analyze environment before entering. more modern goods usually increases quite rapidly after they are launched. the profit margins. . Substantiate the explanation using examples. or because the consumers are switching to a different type of product. and the marketing needed to launch the product can be very high. will increase. And just like us.Product Life Cycle Stages As consumers. all the customers who will buy the product have already purchased it). Maturity Stage – During the maturity stage. A MNC is planning to enter Indian Market. This shrinkage could be due to the market becoming saturated (i. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. the majority of them will invest heavily in new product development in order to make sure that their businesses continue to grow. these products have a life cycle. and that the products they sell all have a limited lifespan. Because most companies understand the different product life cycle stages. each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. the demand for new. Growth Stage – The growth stage is typically characterized by a strong growth in sales and profits. While this decline may be inevitable. as well as the overall amount of profit. Introduction Stage – This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small. which means sales are low. and this is what’s known as the decline stage. while in contrast. Older. consumer testing. The product life cycle has 4 very clearly defined stages. especially if it’s a competitive sector.

how companies should form strategies to capture market ? 15. . Frame two Marketing Goals of an MNC entering India.14. What is the impact of internet and social media in Marketing ? As a result. Explain any four Pricing Strategies with examples. 16.