Product Strategy/ Chapter 20

Question 1

what are the uses of a product lifecycle?

Answer 1

• product termination
• growth projections
• marketing objectives and strategies over the PLC
• product planning
• the dangers of overpowering

Question 2

what are the limitations of product lifecycle?

Answer 2

• unpredictability

- misleading objective and strategy prescriptions

Question 3

what is the definition of portfolio planning?

Answer 3

the process of managing products as groups (portfolios) rather than separate, distinct and independent entities.

Question 4

what are the ‘stars’ strategic objectives in the Boston Matrix ?

Answer 4

-Build sales and/or market share
-Invest to maintain/increase leadership position
-Repel competitive challenges
(Market leader with high growth rate)

Question 5

what are the ‘problem children’s’ strategic objectives in the Boston Matrix ?

Answer 5

-Build selectively
-Focus on defendable niche where dominance can be achieved
-Harvest or divest the rest
(can be developed but at a cost)

Question 6

what are the ‘cash cows’ strategic objectives in the Boston Matrix ?

Answer 6

-Hold sales and/or market share
-Defend position
-Use excess cash to support stars, selected problem children and new product development
(market leader but low growth rate)

Question 7

what are the ‘dogs’ strategic objectives in the Boston Matrix ?

Answer 7

-Harvest, or
-Divest, or
-Focus on defendable niche
(mixed group of market challengers or losers)

Question 8

what are some criticisms of the Boston matrix?

Answer 8

• lack of precision
• competitor reactions
• cash flow predictions

Question 9

what are the implications of portfolio planning?

Answer 9

• different products
• different roles
• different reward systems
• different types of managers

Question 10

what ethical issues is there to do with products?

Answer 10

• Product safety is a major concern particularly in relation to consumables.
• Planned obsolescence: many products are not designed to last a long time.
• Deceptive packaging can occur when a product appears in an oversized package to create the impression that the consumer is buying more than is the case.

Question 11

what strategic options are available for increasing sales volume?

Answer 11

• entry to new markets- new products
• market development- enter new segments
• product development- innovation, promote new uses, product replacement, product line extension
• market expansion- increase usage rates, convert non-users
• market penetration- discourage competitive entry, buy competitors, win competitors customers