3.1 - MARKETINGLesson 8 – Product Portfolio Analysis

Starter Activity

Complete the gap-fill exercise on the lesson worksheet.

Learning OutcomesAll Most Some

• Understand what is meant by ‘product portfolio’• Recognise the

four categories of the Boston Matrix marketing model

• Understand the features of each category of the Boston Matrix• Understand how

to categorise products using the Boston Matrix

• Categorise a real-life business’s products using the Boston Matrix• Explain how the

Boston Matrix links in with the 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

RELATIVE MARKET SHAREHIGH LOW

MAR

KET

GRO

WTH

RAT

E

HIGH

LOW

STAR PROBLEM CHILD

CASH COW DOG

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.

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 minute3. Who goes first - wait for start4. In pairs, Partner A shares, Partner B listens5. Time up6. Partner B responds by summing up what Partner A has

said7. Both partners record answers on the last page of the

lesson worksheet8. Partners switch roles – wait for start

Take timed turns listening,

sharing and responding

Think, Pair Share

Learning OutcomesAll Most Some

• Understand what is meant by ‘product portfolio’• Recognise the

four categories of the Boston Matrix marketing model

• Understand the features of each category of the Boston Matrix• Understand how

to categorise products using the Boston Matrix

• Categorise a real-life business’s products using the Boston Matrix• Explain how the

Boston Matrix links in with the Product Life Cycle

Homework

Have an amazing weekend!!