Slide 1

Today’s lesson

What are we learning today?To learn why companies analyse their product portfolio in terms of their actual and potential market share and market growth.What companies do with the results of the analysis. What I am looking for from youTo undertake a product portfolio analysis.

We are doing this becauseIt will help to develop your understanding of how companies develop their products to meet their marketing objectives.

Slide 2

Group 1…Have a think about the Volkswagen group…make a list of how many brands do they have in their portfolio…Here is a starter for you.Seat….Can you get all 7 of them?

And list as many products from ONE brand you can think of.

Starter – Product Portfolio Analysis

Group 2…Can you think of a number of products that have been established for a long time that have a high market share but a low market growth?

Slide 3

Volkswagen AG… Its brand portfolio

Slide 4

Volkswagen… Its product portfolio

FOX POLO GOLF

BEETLEPASSAT PHAETON

JETTA

TOUAREG TOURAN SHARAN

10 basic model in 123 variants sold in the UK alone as at June 2006!

Slide 5

This is a method of ANALYSING THE MARKET POSITION of a firm's existing products.

It can also help companies compare their products market size and grow in comparison to another company’s.

It is used TOGETHER WITH the PRODUCT LIFE CYCLE as part of the marketing planning process and ‘What do we do next?’

Boston Matrix – Product Portfolio Analysis

Slide 6

Boston Matrix – Product Portfolio Analysis

Rising Star Problem Child

Cash Cow Dog

High market growth

%

Low market growth

%

High market share %

Low market share %

Where would you place a DOG, a CASH COW, a RISING STAR and a

PROBLEM CHILD

Slide 7

Product Life Cycle – BMW 3 Series

1975-82 1982-1990

Sal

es

1990-1998 1998-2006 2006 ->

Why do BMW keep releasing another 3 series?M

atu

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& S

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Dec

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Slide 8

Boston Matrix – Product Portfolio Analysis

Rising Star Problem Child

Cash Cow Dog

High market growth

%

Low market growth

%

High market share %

Low market share %

Profits from Cash Cows help fund new products.

Sales made with little investment.

Sales are falling and it may be

taking profit to keep the dog alive.

Big investment to develop and

advertise to start with but it has big sales potential for

the future.

Excellent products with high growth and high market share; but need

constant advertising.

Slide 9

Cash Cows?

Can you think of a number of products that have been established for a long time that have a high market share but a low market growth?

Slide 10

Chocolate!!!

• Cadbury

• Mars

• Nestlé

These companies sell many brands of chocolates, in the UK and abroad. In pairs, using the internet sites produce a list of all the chocolate brands/products AND using the Boston Matrix place these brands/products in Dogs, Rising Stars, Cash Cows or problem children.

http://www.cadbury.co.uk/EN/CTB2003/about_chocolate/brand_stories/

http://www.mars.com/The_Mars_Directory/index.asp

http://www.nestle.co.uk/ProductNewsAndOffers/AboutOurBrands/ConfectioneryAndCakes/Conf+Products+-+home.htm

Slide 11

Cadbury, Mars & Nestlé

CadburyCadbury's Dairy Milk

Cadbury's Dairy Milk extensions (e.g. Caramel, mint, bubbly etc.)

Heroes

Crème Egg

Milk Tray

Roses

Flake

Double Decker

Picnic

Boost

Dream

Dream extensions (e.g. Dream with strawberries)

MarsMars bar

M & Ms

Snickers

Twix

Maltesers

Milky Way

NestléKitKat

Yorkie

Rolo

Walnut Whip

Smarties

Toffee Crisp

Crunch

Munchies

Caramac

Aero

Drifter

Milky bar

Maveric

Lion bar

All Stars

After Eight

Dairy Milk