The BCG Matrix In Marketing

Improved Essays
The Application of the BCG Matrix In Marketing

The BCG matrix is used to categorize strategic business units or product lines. This matrix analyzes two factors: market share versus market growth. The market share is the sector within a marked controlled by a particular company or product. Market Growth is the increase in the number of people who buy a particular product or service. The categories in the BCG matrix are: stars which have a high market share and a high growth rate. Cash Cows have a high market share as well, but have a low growth rate. Question marks have low market share and operate in high growth markets.The BCG matrix can help marketers with three aspects in the marketing mix: Product, Price and Promotion.

The BCG matrix
…show more content…
Products that fall under question marks can either become dogs or stars, In other words, they either become successful or fail. A huge determinant of the failure or success of a product is the price, simply because price is directly linked with the amount of sales and the amount of profit generated. If marketers classify products under the BCG matrix, they gain more insight on how they operate and will know how to price them. Marketers can price a product classified as a question mark very strategically. They can make the price attractive to customers, but also keeping in mind to leave a space for profits. With strategic pricing for question mark products, they will move up the scale to a 'star ' product. The same should be done for star products so that they excell and become 'cash cows '. When marketers analyze strategies for cash cows, they need to consider that those products are at their peak and should only use pricing strategies to maintain cash cows within their hard won market. An increase in price may drive sales down (especially if it 's an elastic good), demoting cash cows in the product life …show more content…
For example, cash cows are self sufficient, and are at the peak of the product life cycle. Therefore, since they are already successful, they don 't need much promotion like other products. Marketers can instead focus on products like question marks which need lots of promotion since they exist in a fast growing market with little market share. Heavy investment and marketing efforts directed to cash cows is unnecessary unless there is opportunity for a very good return. Instead, additional cash generated from cash cows should be invested in products within markets that have a high growth rate. Promotional strategies directed to cash cows should only be used to maintain their hard won market share. Investing in promotion towards cash cows might not be a smart thing to do since expenses might be passed on to customers, lead to reduction of sales.

The BCG matrix is a beneficial tool not only at aid in constructing business level strategies, but also constructing functional level strategies such as marketing strategies. Identifying products under the BCG matrix and using this knowledge to guide, plan and define a marketing mix allows marketers to gain a competitive advantage and build better

Related Documents

  • Great Essays

    Marketing is the process of first developing a product and then implementing a series of timely strategies aimed at the timely promotion, pricing and distribution of the product to the core group of retailers and potential consumers in the marketplace. Marketing, through the use of a marketing plan connect business like Qantas’s market. Product and promotion are the the main thing for Qantas’s success. The implementation of marketing strategies that satisfy the needs of the end consumer has delivered long term, highly profitable results for Qantas. Combination of strategies they used, is known as a marketing mix Product Price, Promotion and Place .…

    • 1764 Words
    • 8 Pages
    Great Essays
  • Great Essays

    Alltar Executive Summary

    • 1346 Words
    • 6 Pages

    Allstar Brands Corporation, Allround Brand introduction Allstar Brands Corporation has become one of the leading manufacturers of packaged goods in the world, founded in 1924, the Allstar Brands Medicine Group has obtained or merged with many smaller companies. As a leader of over the counter (OTC) cold and allergy remedy, the company’s history of success consists on its Pharmaceuticals Division’s critical long-term strategic plan which helps maintain its cash flow from different periods of time allowing the company to pursue new opportunities in emerging markets (James, Kinnear, & Deighan, 2014). Allstar Brands Divisions Allstar Brands Corporation is divided into three divisions: Consumer Products, International, and Pharmaceuticals. The…

    • 1346 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    Gatorade is the largest producer of sports beverages in the world, and thus have a competitive advantage which allows them to reach out to many more consumers then other companies. In order to maintain their position, PepsiCo owns manufacturing plants worldwide. Gatorade is able to reduce manufacturing costs due to its large production levels. By using a value based pricing strategy, Gatorade, researches how much a product is worth to the consumer and uses this information to price their products (Figure 29). Thus, demand plays a huge role in pricing the products.…

    • 920 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Unit 1 M311 Marketing Mix

    • 394 Words
    • 2 Pages

    The marketing mix is often crucial when determining a product or brand's offer, and is often associated with the four P's: price, product, promotion, and place (McCarthy and Jerome, 1964). Marketing is the process in which the marketer tries to match the demand of the customers, and the latter, to match the asked price in return for the service or good. The most important attribute in marketing is gaining competitive advantage. Competitive advantage is gained through providing the customer with services and products that have additional purposes to the…

    • 394 Words
    • 2 Pages
    Improved Essays
  • Great Essays

    When considering the product-price relationship, CMI's managers must understand and adhere to the internal financial policies of their company. In this case, CMI management has an expectation of a 40%-50% contribution margin, so we will honor that policy when setting the price for the product. (CITE ARTICLE HERE). However, the cost of manufacturing is just one aspect of this process.…

    • 1283 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    A description of three possible marketing opportunities that the business could pursue, including your initial assessment of how each of the opportunities identified will impact on the business: Marketing opportunities Assessment of marketing opportunities Marketing opportunity1: licensing Business sales and profits will be improved due to the increased sub-contractors who have signed the business agreements with Gurp Logistic Company Marketing opportunity 2: online business opportunities More individuals or family households can access the services from Gurp Logistic Company and the increased number of customers will help to improve the business sales and profits Marketing opportunity 3: strategic alliances The majority of sales and profits can come from the big corporates who signed the long term contracts with Gurp Logistic Company. The sales and profits can be large, stable and continuous.…

    • 1627 Words
    • 7 Pages
    Improved Essays
  • Decent Essays

    Marketing strategy: We choose to market our products in various components such as social media, newspaper, magazines, and other techniques. We desired our brand named products to be one of the top talked about companies. We focused on the prices, advertising and brands to be the most competitive product in the market. Our determining factor was to strive to attract as many customers that would make our company be the top manufacturing company in the marketplace simulation. Our search for brand profitability was to obtain responsible priced products that were affordable, dependable, and desirable.…

    • 222 Words
    • 1 Pages
    Decent Essays
  • Decent Essays

    Dental Clinic Case Study

    • 437 Words
    • 2 Pages

    Question 3 Crystal, Great prospection of your point you earned on this week's discussion question about pursuing opportunities of growth in healthcare marketplace and identify expansion. I agree with your point made on the intense competition and uncertainty in the healthcare environment. The Ansoffs matrix is a product of market expansion used to planning for increasing the sale for expanding the range or setting down new markets. The various strategies can be used to develop comparison of new products with current market. There are two major elements of the market expansion grid.…

    • 437 Words
    • 2 Pages
    Decent Essays
  • Improved Essays

    BSBMKG414 Undertake marketing activities Assessment Task 2: Plan marketing activities In this assignment I would like to discuss Mini company. Conduct research on trends in the industry within which the company operates and provide a brief analysis of these trends and the relevance to the company’s activities.  Changes in supplier prices: The price index is calculated using to measure changes in the prices. The average person been produced Beach one time.…

    • 1802 Words
    • 8 Pages
    Improved Essays
  • Decent Essays

    I-Tech Executive Summary

    • 223 Words
    • 1 Pages

    Unquestionably, our company’s marketing mix allowed I-Tech to make decisions that expanded growth and to fulfill our mission/vision of our company. Admittedly, the marketing mix our company utilized is product, price, promotion, and place (distribution), which is called the four Ps, in business. For instance, our three computer products targeted a specific segment of the market such as Mercedes, Travelers, and Workhorse. Furthermore, I-Tech wanted to design the products based on the customer's needs at the price the customers are willing to pay. However, in order to implement this strategy of marketing, our company had to purchase marketing research every quarter to keep up the market trends and control other competitive firms.…

    • 223 Words
    • 1 Pages
    Decent Essays
  • Improved Essays

    Ford’s Product Offering & Classification Ford believes that they have state of the art dealerships which enable them to display their impressive Ford range the best. These automobiles are being displayed in an exclusive and immaculate setting. Their sales personnel are friendly, competent and well trained as they have to walk people through every aspect of procuring a new vehicle. Some of these aspects involve show the prospective buyer the potential products available and their specifications including package options available.…

    • 703 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    The goal of any business organisation is to expand in terms of increased sales, production, profit margins and other elements critical to the lifespan of the business. In this regard, it is notable that businesses are always strategizing on their next expansion strategies. Grace Kennedy’s (GK) focus is anchored on Sweety Come Brush Me Sugar Cane Juice, a newly developed product. It is thus inherent on the marketing team to implement the best growth strategy, Product development in order to expand the performance of the business.…

    • 1286 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Over Market Analysis Essay

    • 1585 Words
    • 7 Pages

    various stakeholders such as suppliers of raw materials, employees, tax obligation and debts owed to the financial institutions. Distributed profit represents the earning source of the business owner (Saxena 2009). The section of the earnings not distributed as interests, taxes or wages remains within the organization to fund the available investment opportunities. Maximizing profit tend to be the core objective of any business entity. Indeed, it is not an easy task for the firm’s leadership to establish the correct decisions that can help maximize earnings.…

    • 1585 Words
    • 7 Pages
    Improved Essays
  • Superior Essays

    Amazon Research Paper

    • 1604 Words
    • 7 Pages

    Has big data improved amazon as a company Introduction This research paper will focus on answering the question “ Has big data improved amazon as a company?” The objectives of this assignment is to examine why the timeline of amazon is relevant to big data. An additional objective is to explore whether amazon have met the needs of its customers through e-commerce and whether the technology in place can be deemed beneficial to the company. An additional objective is to determine if any ethical or security issues are involved.…

    • 1604 Words
    • 7 Pages
    Superior Essays
  • Great Essays

    SWOT Analysis The various exhibits for the SWOT analysis are highlighted in the appendix below. The documents included are the SWOT analysis, Internal Factor Evaluation Matrix, External Factor Evaluation Matrix, and SWOT Bivariate Strategy Matrix. BCG Matrix It is clear that three things are needed to create a BCG matrix for Best Buy,…

    • 1272 Words
    • 6 Pages
    Great Essays