Market Share= a firm's sales expressed as a percentage of the total sales in that market.
Market Growth= the increase in the total value od sales of a entire market from one period to the next
1 of 6
DOGS
Low market growth
Low Market Share
In decline
Do not generate much cash
Should be deleted from the product mix
At the end of the product life cycle
2 of 6
Problem Children/Question Mark
High Market Growth
Low Market Share
Like a naughty child- has potential but sales are not particulaly good
May become the cash cows of the future
At the start of the product life cycle-launch
3 of 6
Stars
High market growth
High market Share
Sucessful products that generate cash
Money is spent on developing and promoting them
May become cash cows of the future
Just reaching the peak of the product life cycle- Growth
4 of 6
Cash Cows
Low Market Growth
High Market Share
In MATURE markets
Well established, generate cash and do not need much marketing
Extension strategies used to stop them becoming dogs and prolong their high earning potential
Money raised from cash cows can be used to support other products
At the peak of the product life cycle- maturity
5 of 6
Summary
Products at the beginning of the product life cycle will not have recovered costs for developing and promoting them yet.
Promotional and devlopment costs of cash cows is likely to have been recovered and their promotional costs should be low.
Firms want a mixture of all 4 types of products
Dogs should be deleted, stars promoted. cash cows kept as they are and problem children invested in so that the stars and problem children might develop into future cash cows.
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