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Terms in this set (40)

-The market-growth/market-share matrix, the Boston Consulting Group (BCG) approach, is based on the philosophy that a product's market growth rate and its market share are important considerations in determining its marketing strategy.

-The market growth/market share matrix integrates a company's products or SBUs into a single, overall matrix for evaluation to determine appropriate strategies for individual product and business units.

(1) All the organization's SBUs and products should be integrated into a single, overall matrix and evaluated to determine appropriate strategies for individual products and overall portfolio strategies.

(2) Managers can use this model to determine and classify each product's expected future cash contributions and future cash requirements.

(3) This model classifies an organization's products into four basic types:
(a) Stars have a dominant share of the market and good prospects for growth; they use more cash than they generate to finance growth, add capacity, and increase market share. Example: Apple's iPod
(b) Cash cows have a dominant share of the market but low prospects for growth; typically they generate more cash than is required to maintain market share. Example: Procter & Gamble's Bounty paper towels
(c) Dogs have a subordinate share of the market and low prospects for growth; these products are often found in established markets. Example: General Motors' (now defunct) Oldsmobile brand
(d) Question marks, sometimes called "problem children," have a small share of a growing market and generally require a large amount of cash to build market share. Example: Mercedes mountain bikes

-The market growth/market share matrix is a helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy; Developed by the Boston Consulting Group (BCG)

-All the companies SBUs and products should be integrated into a single, overall matrix and evaluated to determine appropriate strategies for individual products and overall portfolio strategies

-The long-term health of an organization depends on having some products that generate cash (and provide acceptable profits) and others that use cash to support growth.
-To achieve its marketing objectives, an organization must develop a marketing strategy, which includes identifying a target market and developing a plan of action for developing, distributing, promoting, and pricing products that meet the needs of customers in the target market.

-A marketing strategy is the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members.

-Marketing strategies, the most detailed and specific of the three levels of strategy, are composed of two elements: selecting a target market and the creation of a marketing mix that will satisfy the needs of the of the target market members; the selection of the target market serves as the basis for the creation of the marketing mix to satisfy the needs of that market. Marketing mix decisions should also be consistent with business-unit and corporate strategies and be flexible enough to respond to changes in market conditions, competition, and customer needs. Different elements of the marketing mix can be changed to accommodate different marketing strategies

a. Selecting the Target Market
(1) Selecting a target market is the most important decision a company makes in the strategic planning process.

(2) Identification and analysis of a target market provide a foundation on which a marketing mix can be developed.

(3) When exploring possible target markets, marketing managers try to evaluate how entering them would affect the company's sales, costs, and profits.

(4) Marketers should also assess whether the company has the resources to develop the right marketing mix to meet the needs of a particular target market. The size and number of competitors is also a concern.