Management Department

Master of Business
Administration
MBA-4 Semester BCG Matrix
Marketing Specialisation and GE
Matrix
PRODUCT AND BRAND
MANAGEMENT
Dr. Pallavi Jaggi

CAMPUS: JHANJERI, MOHALI

 Course Outcomes(COs)
S.NO DESCRIPTION

CO1 Illustrate the fundamental concepts of Product Management.

CO2 Evaluate the techniques for product planning and development in

business.
CO3 Identify the significant factors of a brand and branding research.

CO4 Explain the basic requirement for branding research.

CO5 Analyse the strategic concepts of brand loyalty and brand equity
management.
CO6 Dissect the process of brand development through rejuvenation and
re-launch.
 Today’s Agenda….

PRODUCT PORTFOLIO PLANNING AND

ANALYSIS
- BCG Matrix
- GE Matrix
 Product Portfolio Analysis
• Most firms will have a portfolio of products on offer to their
customers, rather than individual products or brands, and will in
many cases have branded products which complement each
other is some way.
• To maintain, or improve profitability, it is advisable for a
company to have products at various stages of their life cycle.
• A firm will gain a reputation for developing and exploring its core
competence in the production of a certain types of product.
• Ford, for example, is known for its cars and not for any other
unrelated products. However, some multinational conglomerates
may offer a huge number of diverse, unconnected goods and
services.
 Product Portfolio Analysis
• Having a broad product portfolio allows the business to spread its
risks because as one product declines in a portfolio another may take
its place.
• Product portfolio analysis is used to assist in planning product
development and strategy by:
1. analyzing an existing portfolio to decide which products should
receive more or less investment, and
2. adding new products to the portfolio or deciding which products and
businesses should be eliminated.
• The best product portfolio is one that fits the company's strengths and
helps exploit the most attractive opportunities.
 WHY WE USE BCG AND GE
MATRIX?

• The BCG and GE have proven over the years to be useful tools
in order to assess the strength of a company’s portfolio of
products relative to the attractiveness of the market they inhabit.
• They can be used internally as a strategy tool.
• Externally as a competitive intelligence technique, with their
strength lying in their ease of use and interpretation.
 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, business or products are classified as low or high

performance depending upon their market growth rate & relative market
share.
RELATIVE MARKET SHARE & MARKET GROWTH
 To understand the Boston Matrix you need to understand how
market share & market growth interrelated.

 Market Share
 Market share is the percentage of the total
market that is being serviced by your company
measured either in the revenue terms or unit volume
terms.
MARKET GROWTH RATE
 Market Growth is used as a measure of a market’s
attractiveness.
QUESTION MARKS/PROBLEM CHILDREN
(HIGH GROWTH, LOW MARKET SHARE)

 Most business start of as question marks

 They will absorb great amount of cash if the market

share remains unchanged (low)

 Question marks have potential to become star &

evenly cash cow but can also become dog.

 Investment should be high for question marks.
 STARS
(HIGH GROWTH, HIGH MARKET SHARE)

 Stars are leader in business

 They also require heavy investment to maintain it’s

large market share.

 It leads to large amount of cash consumption &

cash generation.
 Attempts should be made to hold the market

share
otherwise the star will became a cash cow.
 CASH COWS
( LOW GROWTH, HIGH MARKET SHARE)
 They are foundation of the company & often the
stars of yesterday.
 They generate more cash than required

 They generate more cash than required.

 They extract the profits by investing as little cash as

possible
 They are located in an industry that is mature not

growing or declining
 DOGS
(LOW GROWTH, LOW MARKET SHARE)

 Dogs are the cash traps

 Dogs do not have potential to bring

 High cost – Low quality

 Business is situated at a declining stage

 GE/McKinsey Matrix

 The GE/McKinsey Matrix was developed jointly by

McKinsey and General Electric in 1970s.
 It is also popular as “Directional Policy Matrix”.
 It helps in better strategic decision making and better
understanding.
 It helps in better resource allocation.
 GE Over
BCG
 MARKET ATTRACTIVENESS replaces Market
growth
 BUSINESS UNIT STRENGTH replaces Market
share
 BCG Matrix is used for the product analysis
while
• GE Matrix is used by the Business Strategic
• Units(BSU’s)
MARKET
ATTRACTIVENESS
 Annual market growth rate
 Overall market size
 Historical profit margin
 Current size of market
 Market structure
 Market rivalry
 Demand Variability
 Global opportunities
 BUSINESS UNIT

STRENGTH
Current market share
 Brand image
 Production Capacity
 Corporate image
 Profit Margins relative to competitors
 R & D performance
 Promotional effectiveness
ZONES OF GE MATRIX
EXAMPLE OF MARUTI
SUZUKI’S GE AND BCG
MATRIX
 UNDERSTANDING COMPANY PRODUCT/BRANDS AND
COMPETITIVE BRAND MARKET POSITION

• Marketing plans vary by industry, by size of company and by stage

of growth. The form isn’t as important as the process of preparing it.
Preparing a marketing plan is a process that makes you think about
your business goals and what your marketing strategy will be to
achieve those goals.
• Competitor analysis is a critical part of a firm’s activities. It is an
assessment of the strengths and weaknesses of current and potential
competitors, which may encompass firms not only in their own
sectors but also in other sectors.
• Competitor analysis in marketing is an assessment of the strengths
and weaknesses of current and potential competitors. This analysis
provides both an offensive and defensive strategic context through
which to identify opportunities and threats.
 Assessing Competitor’s Objectives
• A critical step in a competitor analysis is to assess what the
current objectives are for the major competitor products.
• An assessment of current objectives provides valuable
information concerning the intended aggressiveness of the
competitors in the market in the future. It also provides a context
for assessing the capabilities of competitors, i.e., does firm
marketing brand.
• When discussing objectives, it is important to define them
precisely for many different types of objectives exist. In the
context of marketing planning, three basic business objectives can
be identified: Growth, Hold and Harvest Objective.
 Competitor analysis
• Its importance lies in the understanding of competitors, their strategy, and
resources and capabilities.
• More specifically, competitor analysis also allows a firm to assess its own firm
versus competitors and plan for what competitors’ actions may be as a reaction
to actions the firm may take.
• A competitor analysis provides a firm with the knowledge to leverage its
strengths and address its weaknesses and, conversely, take advantage of
weaknesses of competitors and counter their strengths.
• Finally, competitor analysis also gives a firm a better understanding not only of
the competitors but also their overall sector and where the emerging
opportunities may be.
• Consumer buying decision process is the processes undertaken by consumer in
regard to a potential market transaction before, during and after the purchase of
a product or service.
• Customer segmentation is the practice of dividing a customer base into groups
of individuals that are similar in specific ways relevant to marketing, such as
age, gender, interests, spending habits, and so on.
 IMPACT OF GLOBAL FORCES ON PRODUCTS
• Social factors – These factors are related to changes in social
structures. These factors provide insights into behaviour, tastes,
and lifestyles patterns of a population. Buying patterns are greatly
influenced by the changes in the structure of the population, and
in consumer lifestyles. Age, gender, etc all determine the buying
patterns and understanding of such changes is critical for
developing strategies which are in line with the market situations.
• Legal factors – These factors that influence business strategies
are related to changes in government laws and regulations. For a
successful business operation it is important that the businesses
consider the legal issues involved in a particular situation and
should have the capability to anticipate ways in which changes in
laws will affect the way they must behave.
 IMPACT OF GLOBAL FORCES ON PRODUCTS

• Economic factors – These factors involve changes in the global

economy. A rise in living standards would ultimately imply an
increase in demand for products thereby, providing greater
opportunities for businesses to make profits.
An economy witnesses fluctuations in economic activities. This
would imply that in case of a rise in economic activity the demand
of the product will increase and hence the price will increase. In
case of reduction in demand the prices will go down. Business
strategies should be developed keeping in mind these fluctuations.
 IMPACT OF GLOBAL FORCES ON PRODUCTS

• Political factors – This refers to the changes in government and

government policies. Political factors greatly influence the
operation of business. This has gained significant importance off
late. For example: companies operating in the European Union
have to adopt directives and regulations created by the EU.
• Technological factors – These factors greatly influence business
strategies as they provide opportunities for businesses to adopt
new innovations, and inventions. This helps the business to reduce
costs and develop new products. With the advent of modern
communication technologies, technological factors have gained
great impetus in the business arena.