Allocating Marketing Resources
Boston Consulting Group’s Growth-Share Model
Once a Day Marketing™ featured video blog: Is Your Brand a Cash Cow
Hello, I’m Jim Glover, That Branding Guy, for Once a Day Marketing™. Today is Smart Monday and today and we are discussing the Boston Consulting Group Growth-Share Model of where to allocate marketing resources.
BCG created this growth-share model in 1970 but it’s still an effective tool today. The vertical axis depicts market growth. The horizontal axis represents your market share relative to your competition. This tool will enable you to map where a business unit stands with respect to growth and relative market share.
There are four quadrants on the matrix. Cash Cow is a business unit that isn’t growing rapidly at the moment but it does have good market share compared to the competition. A cash cow tends to provide sustained cash flow. Another category is called Stars. That is a business unit where there is quite a bit of growth and also a good position in market share compared to the competition.
The third section is labeled Question Mark (?). A business unit falls into this quadrant when there is growth but relative market share is not very large compared to the competition. The last category is Dogs. A business unit will fall into this section when there is little growth and little relative market share.
Determine whether your business unit is a Cash Cow, Star, Question Mark or a Dog. Then evaluate the strategic options to move forward. You can build it up, hold it as it is, harvest resources or divest.
Building up a business unit requires input of additional resources to grow and increase market share. On the other end of the continuum is divestiture where you would move resources out of one unit to put into your Stars and Question Marks. Leverage the growth-share matrix to make a strategic decision as to how you are going to respond to your businesses placement.
Once a Day Marketing™ positions brands to become #1 in the minds of target customers. Visit our website at www.onceadaymarketing.com. Contact James Glover at (505) 501-1330 or email glover@onceadaymarketing.com. Listen to Ask Those Branding Guys™ every Monday at 11:00am (MST) streaming live on SantaFe.com KVSF 101.5 FM.
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Filed in: 7Ps of Marketing • Day of the Week • Process • Smart Monday
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