Transcript Aims for today - GCSE Business Studies

The Product Life
Cycle
Unit 3
Topic 3.1.3
Aims for today
1. To understand the principles
behind the PLC .
2. To appreciate what a product
portfolio is.
3. To understand the role of the
Boston matrix in analysing a
product portfolio.
The product life cycle
Expanding the product life cycle
The Product Mix/portfolio
Product Portfolio Analysis
Left side: Have a think about the Volkswagen
group…make a list of how many brands they
have in their portfolio…Here is a starter for you.
Golf….Can you get all of them?
- list as many products from ONE brand you can
think of.
Right side…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?
Volkswagen AG… Its brand portfolio
Slide 7
Volkswagen… Its product portfolio
FOX
BETTLE
TOUAREG
POLO
GOLF
PASSAT
TOURAN
10 basic models in 123
variants sold in the UK
alone as at June 2006!
JETTA
PHAETON
SHARAN
Slide 8
Aims for today
1. To appreciate what a product
portfolio is.
2. To understand the role of the
Boston matrix in analysing a
product portfolio.
Product Portfolio Analysis
Left side: Have a think about the Volkswagen
group…make a list of how many brands they
have in their portfolio…Here is a starter for you.
Golf….Can you get all of them?
- list as many products from ONE brand you can
think of.
Right side…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?
Volkswagen AG… Its brand portfolio
Slide 11
Volkswagen… Its product portfolio
FOX
BETTLE
TOUAREG
POLO
GOLF
PASSAT
TOURAN
10 basic models in 123
variants sold in the UK
alone as at June 2006!
JETTA
PHAETON
SHARAN
Slide 12
Task 1: Product Mix/portfolio

Working in pairs, create a product mix
for two of the following companies:

Virgin

Amazon

Sony

Tesco
Why have a product
mix/portfolio?
Boston Matrix – Product Portfolio Analysis
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?’
Slide 15
The Boston Matrix
The matrix describes a product in 2 ways:
1. How fast the whole market for the product is
growing;(High or low market growth)
2. How strong the product is within its market.
(High market share or low market share)
Boston Matrix – Product Portfolio Analysis
High market
share %
High
market
growth
%
Rising Star – Nike ID’s
Excellent products with
high growth and high
market share; but need
constant advertising.
Need a lot of
investment to turn them
into cash cows
Cash Cow – Dyson hoover
Low
market
growth
%
Profits from Cash Cows
help fund new products.
Sales made with little
investment. These are a
businesses most
valuable products
Low market
share %
Problem Child –
Ipad/3D TV
Big investment to
develop and advertise
to start with but it has
big sales potential for
the future.
Dog – Records
Sales are falling and it
may be taking profit to
keep the dog alive.
These products are
unprofitable and
possibly loss making.
Slide 17
Boston Matrix –
Product Portfolio Analysis & Product Life Cycle
High market
share %
High
market
growth
%
Rising Star – Nike ID’s
Growth
Cash Cow – Dyson hoover
Low
market
growth
%
Maturity
Low market
share %
Problem Child –
Ipad/3D TV
Introduction
Dog – Records
Decline
Slide 18
1975-82 1982-1990
1990-1998
Decline / Dog
Maturity & Saturation / Cash Cow
Growth / Rising Star
Introduction / Problem Child
Sales
Combining the PLC & the Boston
Matrix– BMW 3 Series
1998-2006
Why do
BMW keep
releasing
another 3
series?
2006 ->Slide 19
Task
1. Replicate the Boston Matrix in your book.
2. Summarise what each of the 4 categories
represent.
3. Identify a product that is:
• A star
• A problem child
• A cash cow
• A dog
Cash Cows – an example
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 21
Ext. Chocolate!!!
•Cadbury
http://www.cadbury.co.uk/EN/CTB2003/about_chocolate/
brand_stories/
•Mars
http://www.mars.com/The_Mars_Directory/index.asp
•Nestlé
http://www.nestle.co.uk/ProductNewsAndOffers/About
OurBrands/ConfectioneryAndCakes/Conf+Products++home.htm
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.
Slide 22
Cadbury, Mars & Nestlé
Cadbury
Mars
Nestlé
Cadbury's Dairy Milk
Mars bar
KitKat
Cadbury's Dairy Milk
extensions (e.g. Caramel,
mint, bubbly etc.)
M & Ms
Yorkie
Heroes
Crème Egg
Milk Tray
Roses
Snickers
Twix
Rolo
Walnut Whip
Smarties
Maltesers
Toffee Crisp
Milky Way
Crunch
Munchies
Caramac
Flake
Aero
Double Decker
Drifter
Picnic
Milky bar
Boost
Maveric
Dream
Lion bar
Dream extensions (e.g.
Dream with strawberries)
All Stars
After Eight
Dairy Milk
Slide 23
Plenary
1. What is a product
portfolio or mix?
2. Why do we use the PLC?
3. What use is the Boston
Matrix?
• http://www.businessstudiesonline.co.u
k/GcseBusiness/Activities/Module3/Pr
oduct/ProductLifeCycleProfitvSales/fra
me.htm
Solution
Homework
• Coca Cola PLC – How have they maintained it
for so long?