Question No.
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A. Define Marketing.
Marketing refers to activities undertaken by a company to promote the buying or selling of a
product or service. Marketing includes advertising, selling, and delivering products to consumers
or other businesses.
Professionals who work in a corporation's marketing and promotion departments seek to get the
attention of key potential audiences through advertising. Promotions are targeted to certain
audiences and may involve celebrity endorsements, catchy phrases or slogans, memorable
packaging or graphic designs and overall media exposure.
B. Show Strategic planning by a figure.
C. Explain Strategic planning with life examples.
Strategic planning is the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities
Steps in Strategic Planning
Defining a Market-Oriented Mission
The mission statement is the organization’s purpose, what it wants to accomplish in the larger
environment Market-oriented mission statement defines the business in terms of satisfying basic
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customer needs We help you organize the world’s information and make it universally accessible
and useful.
A Mission of … To refresh the world... To inspire moments of optimism and happiness... To create
value and make a difference.
Setting Company Objectives and Goals
Business objectives Build profitable customer relationships Invest in research Improve profits
Marketing objectives Increase market share Create local partnerships Increase promotion
Designing the Business Portfolio
The business portfolio is the collection of businesses and products that make up the company
Portfolio analysis is a major activity in strategic planning whereby management evaluates the
products and businesses that make up the company
Portfolio Example (Which Company?) Cosmetics : Max Factor, Scope, Wella, Covergirl
Dishwashing : Dawn, Joy Feminine hygiene : Alldays, Always, Naturella, Tampax, Whisper Foods
: DariCreme, Folgers, Frymax, Iams, Jif, Mayon, Primex, Pringles, Purico, Star, Sunshine, Victor,
Whirl Haircare : Ascend, Aussie, Balsam, Clairol, Herbal Essences, Head & Shoulders, Nice &
Easy, Natural Instincts, Pantene, Perfect Lights, Prell, Rejoice, Vidal Sassoon, Wash & Go
SBU (Strategic Business Units) can be Company division Product line within a division Single
product or brand
Analyzing the Current Business Portfolio Identify key businesses (strategic business units, or
SBUs) that make up the company Assess the attractiveness of its various SBUs Decide how much
support each SBU deserves
BCG Approach
Problems with BCG Matrix Approaches Difficulty in defining SBUs and measuring market share
and growth Time consuming Expensive Focus on current businesses, not future planning
Product/Market Expansion Grid Strategies Product/market expansion grid is a tool for identifying
company growth opportunities through….. Market penetration Market development Product
development Diversification
Developing Strategies for Growth Market penetration is a growth strategy increasing sales to
current market segments without changing the product. Market development is a growth strategy
that identifies and develops new market segments for current products. Product development is a
growth strategy that offers new or modified products to existing market segments.
Developing Strategies for Growth Diversification is a growth strategy through starting up or
acquiring businesses outside the company’s current products and markets, e.g., Virgin America,
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Virgin Atlantic Airways, Virgin Galactic, Virgin Hotels, Virgin Megastores, Virgin Mobile,
Virgin Money, Virgin Radio, Virgin Rail Group, Virgin Vacations, etc. Downsizing is the
reduction of the business portfolio by eliminating products or business units that are not profitable
or that no longer fit the company’s overall strategy.
Planning Marketing and other functional Strategies
Market segmentation is the division of a market into distinct groups of buyers who have different
needs, characteristics, or behavior and who might require separate products or marketing mixes
Market targeting is the process of evaluating each market segment’s attractiveness and selecting
one or more segments to enter Market positioning is the arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing products in the minds of the target consumer
Developing an Integrated Marketing Mix Marketing mix is the set of controllable tactical
marketing tools—product, price, place, and promotion—that the firm blends to produce the
response it wants in the target market
Marketing Analysis – SWOT Analysis
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Question No. 2
A. What do you mean by BCG growth share matrix?
The Boston Consulting Group (BCG) growth-share matrix is a planning tool that uses
graphical representations of a company’s products and services in an effort to help the
company decide what it should keep, sell, or invest more in.
The matrix plots a company’s offerings in a four square matrix, with the y-axis representing
the rate of market growth and the x-axis representing market share. It was developed by
the Boston Consulting Group in 1970
B. Show BCG growth share matrix by a figure.
C. Explain BCG Growth-Share Matrix by examples.
The BCG growth-share matrix breaks down products into four categories: dogs, cash cows,
stars, and “question marks.” Each quadrant has its own set of characteristics. See below:
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Dogs (or Pets)
If a company’s product has a low market share and is in a low rate of growth, it is
considered a “dog” and should be sold, liquidated, or repositioned. Dogs, found in the
lower right quadrant of the grid, don't generate much cash for the company since they have
low market share and little to no growth. Because of this, dogs can turn out to be cash traps,
tying up company funds for long periods of time. For this reason, they are prime candidates
for divestiture.
Cash Cows
Products that are in low-growth areas but for which the company has a relatively large
market share are considered “cash cows,” and the company should thus milk the cash cow
for as long as it can. Cash cows, seen in the lower left quadrant, are typically leading
products in markets that are mature.
Generally, these products generate returns that are higher than the market's growth rate and
sustain themselves from a cash flow perspective. These products should be taken advantage
of for as long as possible. The value of cash cows can be easily calculated since their cash
flow patterns are highly predictable. In effect, low-growth, high-share cash cows should be
milked for cash to reinvest in high-growth, high-share “stars” with high future potential.
Stars
Products that are in high growth markets and that make up a sizable portion of that market
are considered “stars” and should be invested in more. In the upper left quadrant are stars,
which generate high income but also consume large amounts of company cash. If a star
can remain a market leader, it eventually becomes a cash cow when the market's overall
growth rate declines.
Question Marks
Questionable opportunities are those in high growth rate markets but in which the company
does not maintain a large market share. Question marks are in the upper right portion of
the grid. They typically grow fast but consume large amounts of company resources.
Products in this quadrant should be analyzed frequently and closely to see if they are worth
maintaining.
Special Considerations
The matrix is a decision-making tool, and it does not necessarily take into account all the
factors that a business ultimately must face. For example, increasing market share may be
more expensive than the additional revenue gain from new sales.
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[Important: The matrix is not a predictive tool; it neither takes into account new,
disruptive products entering the market nor rapid shifts in consumer demand.]
Because product development may take years, businesses must plan for contingencies
carefully.
Key Takeaways
The BCG growth-share matrix is a planning tool that uses graphical representations
of a company’s products and services,
The BCG growth-share matrix is used to help the company decide what it should
keep, sell, or invest more in.
The BCG growth-share matrix breaks down products into four categories: dogs,
cash cows, stars, and “question marks.”
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Question No. 3
A. What is the Product/Market Expansion Grid?
The Product Market Expansion Grid, also called the Ansoff Matrix, is a tool used to develop
business growth strategies by examining the relationship between new and existing products, new
and existing markets, and the risk associated with each possible relationship. The matrix aids
growth plans through the introduction of existing or new products, in existing or new markets.
B. Show Product/Market Expansion Grid by a figure.
C. Describe Product/Market Expansion Grid in
detail.
The Product Market Expansion Grid offers four main suggested strategies: Market
Penetration, Market Development, Product Development, and Diversification.
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Market Penetration Strategy: Existing Products + Existing Markets = Low
Risk
The Market Penetration Strategy creates growth by focusing on introducing current products to
existing markets. In such instances, customers may be aware of a product but for some reason are
not purchasing it. This strategy is typically used to achieve one or more of the following objectives.
Increasing or growing the market share of current products with pricing strategies,
promotions, advertising and an increase in sales efforts
Securing dominance of growth markets by identifying which markets offer the best
prospects for existing products
Driving competitors out of a mature market with aggressive pricing and promotional
campaigns
Increasing usage of a product by existing customers through special offers and loyalty
schemes
Market Development Strategy: Existing Products + New Markets = Some Risk
The Market Development Strategy creates growth through the introduction of current products to
new markets. This strategy is used when a company has identified markets that were previously
unidentified or when it wants to expand its market reach. Here too, there are a number of tactics
to enter and develop a new market for existing products.
Focus can be turned to new and untapped geographical areas
New pricing procedures can be used to attract new target audiences
New distribution channels can be created to offer products in new ways and to new
customers
Product Development Strategy: New Products + Existing Markets = Some Risk
The Product Development Strategy is a growth tactic used when a company introduces new
products into existing markets. A company would typically use this approach when current
products are no longer selling. New competencies and skills may be required by the company to
successfully develop products.
This strategy is likely to be more expensive than the market focused tactics and requires more
time. Emphasis needs to be placed on a detailed analysis of customer needs, research and
development, and early introduction to ensure products are first to market. The company can use
the following methods to stimulate growth.
Adding new features to existing products
Innovative and new technologies can be added to products or used to improve products
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Diversification Strategy: New Products + New Markets = High Risk
The Diversification Strategy is used when new products are introduced to new
markets. Diversification is the most risky of all the approaches. This strategy requires the highest
amount of investment of both time and resources.
While this approach is likely to be the most costly, diversification offers a company security and
an advantage should it suffer in one sector of the business because it can then rely on another.
Ansoff reinforces that this strategy will require the company to acquire new skills, techniques and
possibly facilities. Good feasibility studies and research are key to ensure a winning approach.
There are three diversification strategies that an organisation can consider: concentric
diversification, horizontal diversification, and conglomerate diversification.
Concentric Diversification – leveraging a company’s core technical know-how to diversify
its current products into new markets
Horizontal Diversification – the introduction of products that are unrelated to a company’s
core products to existing markets
Conglomerate Diversification – the purchasing of another company in order to diversify
To better understand these three diversification strategies, consider the following example:
Through concentric diversification a company that manufactures glass jars for the food industry
enters the construction market through the manufacturing of glass bricks.
Through horizontal diversification, the glass manufacturer sees the opportunity to offer
specialized cement products with which to build glass brick walls.
And through conglomerate diversification, the glass manufacturing company will acquire the
manufacturer of colored dies with which to color the glass it makes.
