Business Portfolio Planning and BCG Matrix

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Questions and Answers

What is the primary focus of a marketing-orientated company when pricing a new product in its existing product line?

The cost of producing the product

The value placed on the product by different target markets (correct)

The company's overall revenue goals

The price of similar products offered by competitors

What is the main advantage of extending a product line rather than reducing the price of existing brands in the face of price competition?

Increasing market share

Improving product quality

Reducing production costs

Maintaining profit margins (correct)

What is referred to as 'place' in the marketing mix?

The pricing strategy

The geographical location of sales and services (correct)

The product branding

The promotion strategy

What is the primary goal of distribution channels in making products and services available to customers?

Making products available in adequate quantities and convenient locations Signup and view all the answers

What type of distribution channel involves the manufacturer selling directly to the consumer?

Direct distribution channel Signup and view all the answers

Which of the following is NOT a type of new product launch strategy?

Market Segmentation Signup and view all the answers

What is the role of channel intermediaries in distribution channels?

To facilitate the distribution of products to customers and their ultimate needs Signup and view all the answers

What includes wholesalers, retailers, distributors, and the Internet?

Distribution channels Signup and view all the answers

What is the primary focus of physical distribution?

Marketing and movement of products Signup and view all the answers

What is the main purpose of communication in the promotion element of the marketing mix?

To share information, ideas, and views Signup and view all the answers

Which of the following is NOT an offline communication technique?

Public relations Signup and view all the answers

What is the primary goal of Integrated Marketing Communication (IMC)?

To coordinate marketing communications tools Signup and view all the answers

Which of the following is a consideration when choosing a promotional mix?

Product characteristics Signup and view all the answers

What is the main difference between a push strategy and a pull strategy?

Push strategy focuses on distributors, while pull strategy focuses on customers Signup and view all the answers

What is the primary goal of advertising?

To deliver information using multiple types of media Signup and view all the answers

What is the relationship between physical distribution and customer service?

Physical distribution is a part of customer service Signup and view all the answers

What is the primary objective of portfolio planning in a company?

To assess the company's prospects for success Signup and view all the answers

What is the characteristic of a 'Star' in the BCG Matrix?

High profitability, high investment in high-growth markets Signup and view all the answers

What should be done with a 'Cash Cow' in the BCG Matrix?

Defend and use excess cash to support other products Signup and view all the answers

What is the characteristic of a 'Dog' in the BCG Matrix?

Weak products that compete in low-growth markets Signup and view all the answers

What is the main purpose of the Product Life Cycle (PLC)?

To track the length of time a product is in the market Signup and view all the answers

What is the stage of the Product Life Cycle (PLC) where the product is introduced to the market?

Introduction Signup and view all the answers

What is the characteristic of a 'Problem Child' in the BCG Matrix?

Low profitability, high investment in high-growth markets Signup and view all the answers

What should be done with a 'Problem Child' in the BCG Matrix?

All of the above Signup and view all the answers

What is the primary goal of sales promotion?

To stimulate demand and increase sales Signup and view all the answers

Why is sales promotion a popular marketing strategy?

Due to increased impulse purchasing Signup and view all the answers

What is a major reason for the growth in public relations?

Increased recognition of the power of public relations Signup and view all the answers

What is a characteristic of publicity?

No direct media costs Signup and view all the answers

What can public relations achieve?

Foster prestige and reputation, promote products, and generate awareness Signup and view all the answers

What is sponsorship?

A business relationship between a provider of funds and an event Signup and view all the answers

What is ambush marketing?

Any activity where a company tries to associate itself with an event without paying any fee Signup and view all the answers

What type of entities and activities can be sponsored?

A wide range of entities and activities, including sports, arts, community activities, and more Signup and view all the answers

What is one of the objectives of sponsorship?

To create entertaining opportunities Signup and view all the answers

What is direct marketing?

The distribution of products, information, and promotional benefits to target consumers through interactive communication Signup and view all the answers

What is one of the factors that has contributed to the growth of direct marketing?

The growing division of media and markets Signup and view all the answers

What is a unique characteristic of exhibitions?

They bring buyers, sellers, and competitors together in a commercial setting Signup and view all the answers

What is one of the objectives of exhibitions?

To identify prospects and determine their needs Signup and view all the answers

What is product placement?

The deliberate placing of products and/or logos in movies, television, songs, and video games Signup and view all the answers

What is one of the benefits of direct marketing?

It allows for a targeted approach and measurable response Signup and view all the answers

What is an example of a direct marketing method?

Direct mail Signup and view all the answers

Study Notes

Portfolio Planning

Portfolio planning helps management assess a company's prospects for success within each of its products, offers suggestions about what to do within each line, and provides ideas for how to allocate resources.
It involves managing groups of brands and product lines of a company.

Business Portfolio - BCG Matrix

Stars: market leaders in high-growth markets with high prospects for further growth; need to be protected and considered as cash cows of the future.
Problem Child or Question Mark: cash drains due to low profitability; options include increasing investment to turn it into a star, withdrawing support, or finding a niche market segment.
Cash Cow: high profitability, low investment associated with high market share in low-growth markets; need to be defended, and excess cash should be used to support stars, selected problem children, and new product development.
Dogs: weak products that compete in low-growth markets; options include harvesting, divesting, or focusing on a defendable niche.

Product Life Cycle (PLC)

Refers to the length of time a product is introduced to consumers until it's removed from the market.
PLC is typically broken down into four stages: Introduction, Growth, Maturity, and Decline.

Factors Influencing Pricing

Product Line Strategy: companies need to consider where the price of a new product fits into its existing product line, and may modify versions of the product for different target markets.
New Product Launch Strategy: options include Rapid Skimming, Slow Skimming, Rapid Penetration, and Slow Penetration.

Place in Marketing Mix

Refers to the geographical location in which a company sells its products and provides its services.
Important considerations include making products and services available to customers in adequate quantities, in convenient locations, and at times when customers want to buy them.
Distribution channels include wholesalers, retailers, distributors, and the Internet.

Communication Process

Fundamental process for the success of promotion element of the marketing mix.
Offline communications techniques available to marketers include Advertising, Sales Promotion, Publicity, Sponsorship, Direct Marketing, and others.

Integrated Marketing Communication (IMC)

System by which companies coordinate their marketing communications tools to deliver a clear, consistent, credible, and competitive message about the organization and its products.

Important Considerations to Choose Promotional Mix

Resource availability and cost of promotional tools.
Market size and concentration.
Customer information needs.
Product characteristics.
Push versus pull strategies (distribution push vs. consumer pull strategy).

Promotional Mix

Advertising: paid format of delivering information using multiple types of media.
Sales Promotion: marketing strategy to promote products using short-term attractive initiatives to stimulate demand and increase sales.
Public Relations and Publicity: building and maintaining a company's image and reputation through various activities.
Sponsorship: business relationship between a provider of funds, resources, or services and an individual, event, or organization.
Direct Marketing: distribution of products, information, and promotional benefits to target consumers through interactive communication.
Other techniques: Exhibitions, Product Placement, and Guerrilla Marketing.

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Description

Learn about portfolio planning, a process that helps companies assess their prospects for success, allocate resources, and manage brands and product lines. Includes the BCG Matrix framework.