Marketing Management

Instructor: Mr Hasnain Naqvi

Muhammad Zubair
Roll No# 14
Boston consulting group
The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with
long-term strategic planning, to help a business consider growth opportunities by reviewing its

portfolio of products to decide where to invest, to discontinue or develop products. It’s also
known as the Growth/Share Matrix. The Matrix is divided into 4 quadrants based on an analysis
of market growth and relative market share, as shown in the diagram below.
1. Dogs: These are products with low growth or market share.
2. Question marks or Problem Child: Products in high growth markets with low market share.
3. Stars: Products in high growth markets with high market share.
4. Cash cows: Products in low growth markets with high market share
BCG Modelling is not a new phenomenon, but in the changing digital landscape, its meaning for
and application to your marketing strategy will continue to develop. That’s why this blog
addresses not just how to use the BCG Matrix but also the practical application of this matrix to
your strategy, as well as other essential digital marketing matrixes.
Members can use our strategic planning and channel-based Learning Paths to apply models and
matrixes such as the BCG Matrix to their real-world marketing challenges.
Throughout this article, you will find recommended modules to help you achieve more
customer conversions whilst improving your all-important digital marketing return on
investment.
How to use the BCG Matrix?
To apply the BCG Matrix you can think of it as showing a portfolio of products or services, so it
tends to be more relevant to larger businesses with multiple services and markets. However,
marketers in smaller businesses can use similar portfolio thinking to their products or services
to boost leads and sales as we’ll show at the end of this article.
Considering each of these quadrants, here are some recommendations on actions for each:

Dog products:
The usual marketing advice here is to aim to remove any dogs from your product portfolio as
they are a drain on resources.
For example, in the automotive sector, when a car line ends, there is still a need for spare parts.
As SAAB ceased trading and producing new cars, a whole business emerged providing SAAB
parts.

Question mark products:

As the name suggests, it’s not known if they will become a star or drop into the dog quadrant.
These products often require significant investment to push them into the star quadrant. The
challenge is that a lot of investment may be required to get a return. For example, Rovio,
creators of the very successful Angry Birds game has developed many other games you may not
have heard of. Computer games companies often develop hundreds of games before gaining
one successful game. It’s not always easy to spot the future star and this can result in
potentially wasted funds.

Star products:
Can be the market leader though require ongoing investment to sustain. They generate more
ROI than other product categories.

Cash cow products:

The simple rule here is to ‘Milk these products as much as possible without killing the cow!
Often mature, well-established products. The company Procter & Gamble which manufactures
Pampers nappies to Lynx deodorants has often been described as a ‘cash cow company.
BCG Matrix Example: How it can be applied to digital marketing strategies?
The BCG Model is based on products rather than services, however, it does apply to both. You
could use this if reviewing a range of products, especially before starting to develop new
products.
Looking at the British retailer, Marks & Spencer, they have a wide range of products and many
different lines. We can identify every element of the BCG matrix across their ranges:
Stars
Example: Lingerie. M&S was known as the place for ladies underwear at a time when choice
was limited. In a multi-channel environment, M&S lingerie is still the UK’s market leader with
high growth and high market share.
Question Marks
Example: Food. For years M&S refused to consider food and today has over 400 Simply Food
stores across the UK. Whilst not a major supermarket, M&S Simply Food has a following which
demonstrates high growth and low market share.
Cash Cows
Example: Classic range. Low growth and high market share, the M&S Classic range has strong
supporters.
Dogs
Example: Autograph range. A premium-priced range of men’s and women’s clothing, with low
market share and low growth. Although placed in the dog category, the premium pricing means
that it makes a financial contribution to the company.
What Are Market Expansion Strategies?
A market expansion strategy is a growth strategy that involves selling current products in a new
market when growth peaks in the company’s existing sales channels. Being able to successfully
employ market expansion strategies first requires your company to have fulfilled existing
markets. Then, your company needs to identify the other markets that are reachable.
In order to expand into new markets, your company must first evaluate its capabilities and
assets. This could include launching either new or existing products into new channels where
there may be appeal. Then, you must identify the new customers and create messaging that
resonates with them.
Your organization also has to finance these new initiatives. Because no sales expansion strategy
guarantees success, your company has to accept the risks that come with any new initiatives. If
the market expansion strategy succeeds, though, there will be an increase in sales and
profitability company-wide.
How to Develop a Successful Market Expansion Strategy?
Here are the steps you can take to create an effective market expansion strategy for your
business:
1. Create an Overview
In order to create a successful market expansion strategy, you first need to identify why you
want to expand. Start by writing down your reasons for wanting to expand. Identify the new
market you want to pursue and why you think expanding into that channel is a winning
strategy.
Create buyer personas for the individuals or businesses that your products and services would
most appeal to, and explore how you plan to reach them. Identify the marketing channels that
you can use to reach them, whether it’s by getting your products into stores, targeting them
using advertising on social media or pay-per-click ads, or some other strategy.
When you’re done summarizing your strategy, including who you will target and how you will
expand into the new market, it’s time to create a formal proposal justifying the strategy. It’s
always important to earn the support of partners or executives who can offer insight and an
additional perspective.
2. Develop a Financial Plan
After earning the support of executives, co-founders, or partners, it’s time to explore how you
will finance the market expansion strategy. Start by identifying all of the expenses that will
accompany the market expansion. Itemize the individual resources you will need for success
and how long it will take for the new initiative to be profitable. You should treat this new
initiative like its own business, which should be able to support itself financially within a
reasonable amount of time so you can regain your initial investment.

3. Expand into new channels

Once you have a plan and know how you will finance the new initiative, it’s time to expand into
new channels. These channels are the pathways you will take to bring your product or service
to the audience you’re targeting. There are a variety of different channels you could use, such
as selling your products through retail outlets or by using digital advertising and selling online.
Expanding into a new market using the right channels is critical for engaging your new
customers effectively and being successful with the new initiative.
4. Engage new audiences
To successfully engage your audience, your marketing strategy should include various
marketing components, such as the value proposition that your product or service offers. Your
efforts should focus on positioning your company as being authentic and on producing high-
quality products. Recognize that traditional metrics, like website traffic, may not be an
authentic representation of success.
5. Focus on brand growth
Take what you learned from your initial engagements with new customers and build upon it.
Identify their primary motivations and habits. By better understanding the habits of these new
customers, you can often identify other potential customers who have the same motivations
and behaviors. While you do want to target specific types of buyers, the ultimate goal is market
saturation.
By creating a compelling marketing message that appeals to a broad audience, you should be
able to attract new customers who you have not even considered. While it can be challenging
to find a balance between messaging that is targeted and messaging that has broad appeal, you
should ideally create a single message that accomplishes both goals. If you want to test
different messages, you should try them on different platforms. However, it’s important to
remember that one of your buyer personas could see an ad meant for another. This is why it’s
critical to maintain consistency in your messaging as much as possible.
6. Increase sales on existing products
Your initial goal should be to test one or more of your existing products to evaluate how they
perform in the new market. You can use the feedback you received from customers in other
markets to create messaging for those products in the new market you’re entering. Develop a
strategy where you deliver value and minimize the effort and cost customers have to invest to
get it. Some strategies you could try include:
Short sales that offer generous discounts
Special events that deliver maximum value
Referral programs
Contests and giveaways
7. Introduce a line of new products
As part of your market expansion strategy, you may want to consider exploring additional
revenue opportunities through new product development. If you intend to invest in new
product development, you should start by identifying a need in the market that you could solve
with the help of your new product. Once you have developed a concept for the new product,
you can then assign a development team.
You may want to consider involving your customers during the design phase, as this can help
you to provide a solution that better meets their needs, which should ultimately lead to more
sales. You can interact with customers using a web portal or over social media. In addition to
helping you remain focused on the benefits to the end-user, they can also help you create a
product name that resonates with them.
Tips for a Strong Market Expansion Strategy
With a strong market expansion strategy, you can keep your business growing, regardless of
what’s happening in the economy. Here are some tips you can use to develop one for your own
business.
Conduct In-Depth Market Research
If you’re considering launching a new product into the new market, start by conducting in-
depth market research before committing additional resources. By starting with research, you
can feel more confident about the success of the new product or service. You can also find out
how much customers would be willing to pay and whether that would allow you to be
profitable after production and delivery. By doing market research upfront and determining the
break-even point, the point at which your total cost and total revenue will be equal, you can
determine whether you should move forward with developing the new product.
Increase Sales for Current Products and Services
Examine your current customer base to identify the segment that would be most willing to buy
more from you. You can accomplish this by establishing different customer groups and
examining their buying history as well as demographics like age and gender. By doing this, you
can modify your marketing messaging so it better appeals to this segment. You can also focus
the majority of your marketing efforts on this customer group in order to increase sales and
revenue.

Learn from Your Competition

Identify your major competitors in the different markets, and monitor their activity to see what
they’re doing online. You can often learn a lot from your competitors, especially if you’re still
learning about your new target audience. Observe the way they interact with customers and
the messaging they use. Take what you can learn from it and apply what’s relevant to your own
business.
Maximize Online Opportunities
There are a wide variety of places you can advertise online, including social media platforms
like Instagram and Facebook. You may also want to consider using search engine optimization
(SEO) strategies to improve your website’s ranking in the search engines. By using a well-
designed website with strong messaging that emphasizes the key benefits of your products,
you can maximize on all online marketing channels.