Company and marketing strategy

Question 1

What is the Boston Consulting Group approach, the BCG growth-share matrix?

Answer 1

A portfolio-planning method that evaluates a company’s strategic business units in terms of its market growth rate and relative market share. SBU (Strategic Business Unit):s are classified as starts, cash cows, question marks or dogs

Question 2

Explain the four steps in the BCG growth-share matrix

Answer 2

1. Stars are high-growth, high-share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows
2. Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of cash that the company uses to support other SBUs that need investment and to develop new businesses
3. Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out
4. Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash

Question 3

What is the five customer value-driven marketing strategies?

Answer 3

1. Market segmentation - Dividing a market into distinct groups of consumers who have different needs, characteristics or behaviours and who might require separate products or marketing programmes
2. Market segment - A group of consumers who respond in a similar way to a given set of marketing efforts
3. Market targeting - The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
4. Positioning - Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers
5. Differentiation - Actually differentiating the market offering to create superior customer value

Question 4

What does the four P’s of marketing means?

Answer 4

The set of controllable tactical marketing tools - product, price, place/marketing channels and promotion/marketing communications - that the firm blends to produce the response it wants in the target market

Question 5

Define and name the four Ps of marketing

Answer 5

1. Product means the goods-and-services combination the company offers to the target market
2. Price is the suggested retail price
3. Place/marketing channels include the company’s activities that make the product available to target consumers in various markets, like distribution and how a product is delivered
4. Promotion/marketing communications means activities that communicate the merits of the product and persuade target customers to buy it, like branding and advertisement

Question 6

What does SBU stand for?

Answer 6

Strategic Business Unit

Question 7

Explain company-wide strategic planning

Answer 7

Corporate level:

• Defining the company mission
• Setting company objectives and goals
• Designing the business portfolio

Business unit, product, market levels
- Planning marketing and other functional strategies.