1.3.5 marketing strategy

• boston matrix


  is a tool used by businesses to analyse their product portfolio and make strategic decisions about each of their products.

  the matrix classifies products into four categories based on their market share and the market growth.
• star


  star products have a high market share in a high-growth market.

  high investments in stars to maintain or increase their market share

  • significant positive cash flow
  • potential for continued growth
  • marketing focuses on building brand, increasing market share and maintaining profit
• cash cow


  cash cows are products with a high market share in a mature market (the entire market is no longer growing)

  • significant positive cash flow but low growth potential
  • stable source of income, requires minimal investment
  • marketing focuses on maintaining their market share and profitability
  • cash cows are valuable assets and can be used to fund the development of new products
• question marks


  low market share in a high-growth market

  these products have the potential to become stars if the company invests in their development.

  • often a negative cash flow as require high investment to increase their market share and turn them into stars
  • if the investment does not result in growing the business may discontinue the product
  • marketing efforts focus on increasing their market share and brand recognition
• dog


  dog products have a low market share in a low-growth market

  • little revenue for the company and have no growth potential
  • businesses often move away (divest) from these to focus on more profitable products
  • marketing efforts for dog products are minimal or zero
• star


  • high market growth
  • high market share
  • positive cash flow
  • hold
• cash cow

  • low market growth
  • high market share
  • cash generating
  • harvest or milk
  • use to develop funds, other products
• question marks


  • high market growth
  • low market share
  • cash absorbing - requires heavy investment
  • build
• dog


  • low market growth
  • low market share
  • negative cash flow
  • divest
• relationship between boston matrix and product life cycle


  • question marks (introduction) - grow market share to become stars
  • stars (growth) - sustain growth to become cash cows
  • cash cows (maturity) - maximise profit and fund other ventures
  • dogs (decline) - phase out to reduce costs or redeploy resources

  the boston matrix and product life cycle are valuable tools in strategic planning, showing how products evolve and helping companies allocate resources effectively at each stage.
• uses of boston matrix


  • a useful tool for analysing product portfolio decisions
  • a snapshot of the current position
  • has little or no predictive value
  • does not take account of environmental factors
• limitations of boston matrix


  the model can be criticised in several ways:

  • market growth is an inadequate measure of a market's attractiveness
  • market share is an inadequate measure of a product's ability to generate cash
  • the focus on market share and market growth ignores issues such as developing sustainable competitive advantages
  • the product life cycle varies
• Marketing strategies vary depending on type of market being targeted
• Mass markets


  Large numbers of customers who have similar needs and wants focus on building brand awareness and appealing to a broad audience

  • Focus is for advertising campaigns to reach as many people as possible: mass media eg. National tv
  • Advert message is simple. Focus to create a strong brand identity
• Niche markets


  Smaller groups of customers with specific needs and wants

  Focus on targeting a specific segment and building relationships

  • Adverts are targeted and may use social media to reach potential customers
  • Advert mesages are detailed (include technical information relating to specific needs of the target market)
• Business to business - B2B


  Focus on selling products to other businesses eg, software companies selling to other businesses; manufacturers selling parts to other manufacturers.

  Emphasis is on building relationships with other businesses and demonstrating how your product can help them be more successful

  • Marketing campaigns could include case studies that demonstrate the value of your product/service
  • These messages are often more technical and may focus on features and benefits that are relevant to other businesses.
• Business to consumer - B2C


  Focuses on selling products/services directly to consumers.

  Emphasis is on building brand loyalty and creating a positive customer experience

  • Social media ads or influencer marketing campaigns that appeal to the emotions of consumers
  • Emotional messages that focus on the lifestyle benefits of using the product/service
• Developing customer loyalty: customer service 


  Receiving good customer service encourage customers to return and recommend the business to others
• Developing customer loyalty: loyalty cards 


  Loyalty cards offer rewards or discounts for frequent purchases
• Developing customer loyalty: saver schemes

  Discounts or special pricing for customers save money with them.

  This helps customers gradually save up some money that can be used at periods when food bills are usually higher eg, christmas