Starter Activity Complete the gap-fill exercise on the lesson worksheet.
Learning Outcomes All
Most
• Understand what • Understand the is meant by features of each ‘product portfolio’ category of the Boston Matrix • Recognise the
Some
• Categorise a reallife business’s products using the Boston Matrix
four categories of • Understand how • Explain how the the Boston Matrix to categorise Boston Matrix marketing model products using the links in with the Boston Matrix Product Life Cycle
The Boston Matrix • There are many ways of doing product portfolio analysis
• However, one way is to use a technique called the Boston Matrix • The Boston Matrix is a marketing tool that was developed by the Boston Consultancy Group (BCG) as a method of analysing and planning a business’s portfolio of products
The Boston Matrix • The Boston Matrix allows businesses to measure the extent to which an individual product is succeeding in its market • Using the Matrix, every product in the portfolio is categorised according to the level of growth in the product’s market and its relative share of that market
Market Growth • How fast is the whole market for the type of product growing? For example, the market for tablet pc’s is growing rapidly, whereas the market for video recorders is shrinking • High market growth is where the % increase in sales year on year is high and possibly rising • Low market growth means that sales are rising by a relatively small % or possibly falling
Market Share • How strong is the individual product within its market? This is measured as number or value of sales
• What market share does it have? • For example, the Apple iPod has a high market share of the mp3 player market whereas the Microsoft Zune has a low market share
The Boston Matrix • Using the factors of market growth and market share, each product in a business’s portfolio can be categorised as one of the following:
STAR
PROBLEM CHILD
CASH COW
DOG
The Boston Matrix
MARKET GROWTH RATE
HIGH
STAR
PROBLEM CHILD
CASH COW
DOG
LOW HIGH
RELATIVE MARKET SHARE
LOW
The Boston Matrix are products with a high market share in a high growth market are products with a low market share in a high growth market are products with a high market share in a low growth market
are products with a low market share in a low growth market
Activity Using pages 240-241 of the course textbook, see what you can learn about the four categories of the Boston Matrix. Take notes using the table on page 3 of the lesson worksheet.
Activity Working in groups, you are going to carry out a product portfolio analysis using the Boston Matrix. You can choose which company’s products you wish to analyse, but here are some suggestions: Kelloggs, Cadbury, Walkers, Coca-Cola You are going to create a poster each showing the Boston Matrix and where you think your chosen company’s products should be placed on it. You may draw the products or just write the name if you prefer.
Be prepared to explain your choices! Start this task by making a list of ten products that your chosen company produces, then decide where these go in your matrix.
Think, Pair Share
Take timed turns listening, sharing and responding
1. How does the Boston Matrix link in with the Product Life Cycle? For example, whereabouts would you expect products that are stars to be on the life cycle model? 2. Think time – 1 minute 3. Who goes first - wait for start 4. In pairs, Partner A shares, Partner B listens 5. Time up 6. Partner B responds by summing up what Partner A has said 7. Both partners record answers on the last page of the lesson worksheet 8. Partners switch roles – wait for start
Learning Outcomes All
Most
• Understand what • Understand the is meant by features of each ‘product portfolio’ category of the Boston Matrix • Recognise the
Some
• Categorise a reallife business’s products using the Boston Matrix
four categories of • Understand how • Explain how the the Boston Matrix to categorise Boston Matrix marketing model products using the links in with the Boston Matrix Product Life Cycle
