1.3.5 The Boston Matrix

Created by

merjema

Cards (12)

what is a product portfolio?
A product portfolio is the collection of all the products and services offered by a company
what is the boston matrix?
The Boston matrix is a marketing planning tool which helps
managers to plan for a balanced product portfolio
It looks at two dimensions: market share and market growth, in order
to assess new and existing products in terms of their market potential
It helps marketing managers work out how much to spend on each
product
what are star products?
high market share
high growth market
what do star products need to maintain?
their current marketing spend to keep sales high
what could happen to stars if managed correctly?
they can become cash cows
what are question mark products?
low market share
in a high growth market
what could happen to question marks if managed correctly?
they could have potential to become stars but need a lot of investment and marketing to do this
what are cash cows?
high market share
low growth market
good sellers and need little to no new investment
what do cash cows need?
monitoring in case they become dogs
what are dog products?
low market share
low growth market
require no investment as they are in their decline phase of their lifecycle
product may have become obsolete or replaced
may consider discontinuing or withdrawing the product
what are the uses of the boston matrix
the Boston matrix is a good starting point when reviewing an existing product line to decide future strategy and budgets
limitations of boston matrix
Products may not be low or high market share they could be medium
High market share does not always lead to high profits, there are high costs also involved with high market share
Many people argue this matrix is too simple