Explain the Growth Matrix Structure visually.

B.C.G. analysis or Growth Matrix Structure is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. It involves rating products according to their market share and market growth rate. The products are then plotted on a two dimensional map. Products with high market share but low growth are referred to as ‘cash cows’. Products with high market share and high growth are referred to as ‘stars’. Products with low market share and low growth are referred to as ‘dogs’ and should usually be discontinued. Products with low market share but high growth are referred to as ‘question marks’ or ‘problem children’ or ‘wild cats’. The technique can also help companies think about the priority and resources that they should give to the different businesses in their portfolio. A ‘question mark’ has the potential to become a ‘star’ in the future if it is developed. A company should have a balanced portfolio. This implies having at least one ‘cash cow’ which can generate revenue that can be used to develop one or more ‘question marks’. This process is referred to as ‘milking your cash cow’.

Билет №14

1. Describe the essence of MBWA, its principles and objectives.

1. Do you think that the product life cycle concept is a useful marketing-planning tool? Why or why not?

This is the idea that all products have a birth, a life and a death, and that they should be financed and marketed with this in mind. Even as a new product is being launched, its manufacturer should be preparing for the day when it has to be killed off. Its sales and profits start at a low level, grow (it is hoped) to a high level and then decline again to a low level. Sometimes this cycle is simply referred to in marketing circles as PLC.

Philip Kotler, one of the world’s leading authorities on marketing, breaks the product life cycle into five distinct phases: Product development. Introduction.Growth.Maturity.Decline.

Although managers know that a new product will follow this cycle, they are not sure when each phase will start and for how long each one will last. Although some products appear to have been around for ever (Kellogg's corn flakes, for example, or Kodak cameras) the products that bear these names today are entirely different from the ones that carried the same brand 50 years ago. The continuity of the brand name helps to disguise the fact that the product itself has been through several life cycles.

Products of fashion, by definition, have a shorter life cycle, and they thus have a much shorter time in which to reap their reward. A distinc­tion is sometimes made between fashion items, such as clothing, and pure fads. It is not always immediately obvious into which of these two categories a product falls. When they were first introduced in the early 1980s, in-line skates seemed as if they might be a brief fad. But 20 years later they were still selling strongly, firmly set in the mature stage of their life cycle. They may not be destined for the life cycle of the corn flake, but they have already outlived many seemingly more permanent fashions.

Билет №15

1. Describe the essence of MBO, its principles and objectives.

1. What marketing strategies are appropriate at the introduction stage of the product life cycle?

This is the idea that all products have a birth, a life and a death, and that they should be financed and marketed with this in mind. Even as a new product is being launched, its manufacturer should be preparing for the day when it has to be killed off.

Introduction. The product’s costs rise sharply as the heavy expense of advertising and marketing any new product begin to take their toll. At this phase consumers must be aware of the product’s existence and persuaded to buy it. Some producers apply a market-skimming strategy (price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then lowers the price over time). It is a temporal version of price discrimination/yield management. It allows the firm to recover its sunk costs (costs that have already been incurred and which cannot be recovered to any significant degree) quickly before competition steps in and lowers the market price. Other producers employ a market-penetration strategy (see ‘Market penetration’ Point).

Билет №16

1. What leadership styles do you know? Characterize each of them.

2. What marketing strategies are appropriate at the growth stage of the product life cycle?

This is the idea that all products have a birth, a life and a death, and that they should be financed and marketed with this in mind. Even as a new product is being launched, its manufacturer should be preparing for the day when it has to be killed off.

Growth. As the product begins to be accepted by the market, thecompany starts to recoup the costs of the first two phases. ‘Early adopters’ join the ‘innovators’ who were responsible for the first sales, so that sales rise quickly, producing profits. This generally enables the producer to benefit from economies of scale. Competitors will probably enter the market, usually making it necessary to reduce prices, but the competition will increase the market’s awareness and speed up the adoption process.

Билет №17

1. How would you instruct management leaders in true leadership skills?

1. What marketing strategies are appropriate at the maturity stage of the product life cycle?

This is the idea that all products have a birth, a life and a death, and that they should be financed and marketed with this in mind. Even as a new product is being launched, its manufacturer should be preparing for the day when it has to be killed off.

Maturity. By now the product is widely accepted and growth slows down. Before long, however, a successful product in this phase will come under pressure from competitors. The producer will have to start spending again in order to defend the product’s market position. Product managers can attempt to convert non-users, search for new markets and market segments to enter, or try to stimulate increased usage by existing users. Alternatively they can attempt to improve product quality and to add new features, sizes or models, or simply to introduce periodic stylistic modifications.

Билет №18

1. What are the differences between managers and leaders, if any?

1. What marketing strategies are appropriate at the decline stage of the product life cycle?

This is the idea that all products have a birth, a life and a death, and that they should be financed and marketed with this in mind. Even as a new product is being launched, its manufacturer should be preparing for the day when it has to be killed off.

Decline. The company will no longer be able to fend off the compe­tition, or some change in consumer tastes or lifestyle will render the product redundant. At this point the company has to decide how to bring the product's life to an end - what is the best end-game that it can play? (The end game is a strategy that a company evolves for a product that seems to be on its last legs. Should the company bleed the product for all it is worth before it dies? Or should it introduce an aggressive pricing policy aimed at forcing its competitors out of business and allowing it to continue in a much reduced niche market? In her book Managing Maturing Businesses, Kathryn Harrigan, a Harvard professor, argues that end games can be highly profitable. She writes: ‘The last surviving player makes money serving the last bit of demand, when the competitors drop away.’ When some competitors choose to withdraw from a market, those who remain will obviously gain a temporary increase in sales as customers switch to their product.) A product can be replaced by new ones, due to advances in technology, or to changes in fashions and tastes. When a product has clearly entered its decline stage, some manufacturers will abandon it in order to invest their resources in more profitable or innovative products.

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