The Growth Share Matrix
Helen Strong
The Growth Share Matrix: Purpose
This matrix will be used when you are conducting an audit of your product portfolio in which you want to determine whether they should still be produced, and if yes, what level of effort and marketing budget should be allocated to the product manager.
The matrix can be applied to examine the competitive position of all the products in a particular market. When were brands launched? How many upgrades have they had, and what level of resources is being put behind them to sustain their market position?
It is also useful when contemplating a merger to understand the value of the product and its strategic role in generating the turnover of the organization.
The Growth Share Matrix: Structure and Description
The Boston Consulting Group (BCG) growth share matrix (Figure 34.1) considers the relative market share of products against the growth rate of their markets. The rationale is that these factors will influence the turnover, profit contribution, or both, that can be realized from the product in question.
The Growth Share Matrix: Strategic Considerations
This model is used during a strategic review process when assessing the product portfolio of a company. The position of products within the matrix will define the expectations of returns, and determine the investment in terms of the required marketing support.
Figure 34.1 The growth share matrix
Source: Adapted by permission from Boston Consulting Group (1973), The BCG Portfolio Matrix from the Product Portfolio Matrix. © 1970 by The Boston Consulting Group (BCG).
Best use is made of this model by tracking market growth and, over the same period, by tracking sales and market share growth. Products in the different quadrants offer different returns. A cash cow is probably in maturity or at the end of its life cycle. With little investment, it will be providing a steady income for the company.
Dogs have the potential to consume company resources with no hope of generating greater returns. However, dogs should not be discarded without proper consideration. They could be playing a strategic role in preventing the entry of a competitor, or maintaining shelf space in the retail environment.
Question marks need additional information. The company needs to establish the factors that are holding its growth down. Is it possible, with the proper managerial attention, to move the product from its current position to become a star, that is, a product that has a high market share?
The Growth Share Matrix: Implementation
So what is the information associated with application of this model?
First and foremost, you are going to need the essentials of the current market share of the product, and its current growth rate. This is preferably in relation to the market as a whole. That is, you will want to plot
Figure 34.2 Adspend versus share and unit sales
the relative position of your products against their competitors. You will look at the changes that have occurred from a year ago and possibly even five years ago. How have the positions on the matrixes changed over time?
To make strategic decisions, you are also going to need information on the relationship between market share and sales units versus adspend and promotional spend (Figure 34.2). If you are able to demonstrate that the position of the product moves with the investment of marketing resources, then you have an indication of how much is necessary to move the sales of the product. But sometimes it is not that simple.
In the example given in Figure 34.2, one would deduce that in spite of holding adspend constant after month 5, the unit sales continue growing. However, the fact that market share is not moving is a problem. Some competitor is growing the market at a faster rate than the unit sales increase, and the product is actually losing ground. The graph could also be indicating that some other factor than adspend is at play in increasing unit sales.
The Growth Share Matrix: Conclusions
The lesson from this situation is that to apply the BCG growth share matrix, you also need information about competitive activity and the drivers of growth for your product. Do not be fooled by unit growth. You need to see all market movement in context.
Some people relate the position of a product in the growth share matrix to its position on the product life-cycle curve. This is not necessarily a valid assumption. For example, the problem children or question marks are products in a growth market. The degree of marketing investment required to move them to stars could be greater than that indicated by the position on the life-cycle curve.
References
Ahonen, T.T. 2013. “Around the World With Mobile: Global Insights and Regional Relevance of Mobile Marketing.” Presented at MMA Forum: Mobile’s Role in the Path to Purchase, New York, May 8 – 10. New York: Mobile Marketing Association. Available from: http://www.slideshare.net/vivastream/around-the-world-with-mobile-global-insights-and-regional-relevance-of-mobile-marketing-20847876
Bae, Y.H. 2012. Three Essays on the Customer Satisfaction–Customer Loyalty Association http://ir.uiowa.edu/etd/3255 (accessed July 3, 2013).
Barron, P. 2013. Force Field Analysis http://www.change-management-consultant.com/force-field-analysis.html (accessed October 22, 2013).
Bernstein, D. 2011. Value Proposition: A Free Worksheet to Help You Win Arguments in Any Meeting http://www.marketingexperiments.com/blog/general/value-proposition-worksheet.html (accessed July 10, 2013).
Boston Consulting Group. 1973. “The Experience Curve–Reviewed IV.” The Growth Share Matrix or The Product Portfolio, http://www.bcg.com/documents/file13904.pdf (accessed May 25, 2014).
Clayton Christensen Institute. 2012. Disruptive Innovation, http://www.christenseninstitute.org/key-concepts/disruptive-innovation-2/ (accessed July 17, 2013).
Content Marketing Institute, 2011, What is Content Marketing?, Cleveland,
Z Squared Media LLC. Available from: http://contentmarketinginstitute.com/what-is-content-marketing/ (accessed May 19, 2014).
Eslkevin’s Blog. May 16, 2013. Hofstede’s Cultural Dimensions Theory, http://eslkevin.wordpress.com/2013/05/16/hofstedes-cultural-dimensions-theory/ (accessed September 9, 2013).
Fleishman-Hillard and Lepere Analytics. 2013. The Authenticity Gap: Managing Expectations and Experience, http://fleishmanhillard.com/wp-content/uploads/meta/resource-file/2013/authenticity-gap-executive-summary-1367433000.pdf (accessed September 16, 2013).
Fu, B.; and T.P. Labuza. 2000. Shelf Life Testing: Procedures and Prediction Methods for Frozen Foods. St Paul, MN: University of Minnesota. http://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&ved=0CEYQFjAF&url=http%3A%2F%2Fwww.researchgate.net%2Fpublication%2F2402471_Shelf_Life_Testing_Procedures_and_Prediction_Methods_for_Frozen_Foods%2Ffile%2F9fcfd50ca4182953af.pdf&ei=G6rSUpTEIOHL0QW6wYGIBA&usg=AFQjCNF8mnmqOlASQwMO3-i2K_dcOMaEsA&bvm=bv.59026428,d.bGQ (accessed January 12, 2014).
Greenberg, M. 2009. Do the Math: An Easy Formula to Forecast Customer Growth, http://venturebeat.com/2009/08/25/do-the-math-an-easy-formula-to-forecast-customer-growth/ (accessed August 18, 2013).
Gunelius, S. 2011. Brand Equity Basics – Part 1: What Is Brand Equity?, http://aytm.com/blog/research-junction/brand-equity-basics-1/ (accessed June 3, 2013).
Jarvis, B. n.d. Conjoint Analysis 101, http://www.pragmaticmarketing.com//resources/conjoint-analysis-101?p=0 (accessed August 18, 2013).
Johnston, J. 2012. How Volvo Construction Uses Digital Marketing to Fuel Sales, http://www.marketingsherpa.com/video/volvo-digital-marketing-fuel-sales (accessed August 20, 2013).
Keaveney, S. April 1995. “Customer Switching Behavior in Service Industries: An Exploratory Study.” Journal of Marketing 56, no. 2, pp. 71–82.
Keller, K.L. 1999. Blending Branding Theory & Practice: Insights & Lessons from Applying the Brand Resonance Model, http://www.docstoc.com/docs/108016293/BLENDING-BRANDING-THEORY-and-PRACTICE (accessed May 25, 2014).
Keller, K.L. 2006. “Measuring Brand Equity.” The Handbook of Marketing Research: Uses, Misuses, and Future Advances, eds. R. Grover; and M. Vriens. Thousand Oaks, CA: Sage publication.
Keller, K.L. 2010. The New Branding Imperatives: Insights for the New Marketing Realities, http://exec.tuck.dartmouth.edu/downloads/350/msi_ff_10-700.pdf
(accessed June 3, 2013).
King, D. 2005. Ge 1300. Introduction To Human Geography Lecture 15. Location of Industry, http://www.csiss.org/classics/archive/lect15.htm (accessed September 12, 2013).
Kirby, J. 2013. A Unique Approach to Marketing Coca-Cola in Hong Kong, http://blogs.hbr.org/hbr/hbreditors/2013/02/a_unique_approach_to_marketing_coca_cola_in_hong_kong.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29 (accessed July 15, 2013).
Klepper, S. 1997. “Industry Life Cycles.” Industrial and Corporate Change, Vol 6, No. 1, pp. 145–180.
Kotler, P. 2000. Marketing Management, Millennium Edition. Upper Saddle River, NJ: Prentice-Hall, Inc.
Kugytė, R.; and L. Šliburytė. 2005. “A Standardized Model of Service Provider Selection Criteria for Different Service Types: A Consumer-Oriented Approach.” ISSN 1392-2785 Engineering Economics 43, no. 3.
Kussmaul, M. 2012. Marketing: The Four P’s or the Four C’s, http://www.marketplacemotivations.com/articles/magazine-articles/54-marketing-the-four-p-s-or-the-four-c-s (accessed September 9, 2013).
Lasswell, M. 2004. Lost in Translation Time and Again, Product Names in Foreign Lands Have Come Back to Haunt Even the Most Brilliant of Marketers, http://money.cnn.com/magazines/business2/business2_archive/2004/08/
01/377394/ (accessed September 9, 2013).
Levitt, T. July–August. 1960. “Marketing Myopia.” Harvard Business Review 38, no. 4, pp. 45–56.
McClaren, D. 2013. Nike Takes Gamification to the Next Level with Nike Fuel Missions, http://www.theuksportsnetwork.com/nike-takes-gamification-to-the-next-level-with-nikefuel-missions (accessed July 15, 2013).
McSweeney, B. 2002. Hofstede’s Model of National Cultural Differences and Their Consequences: A Triumph of Faith – a Failure of Analysis, http://www.uk.sagepub.com/managingandorganizations/downloads/Online%20articles/ch05/4%20-%20McSweeney.pdf (accessed September 6, 2013).
MindTools.com. n.d. a. Porter’s Five Forces Assessing the Balance of Power in a Business Situation, http://www.mindtools.com/pages/article/newTMC_08.htm (accessed December 31, 2013).
MindTools.com. n.d. b. Cost-Benefit Analysis, http://www.mindtools.com/pages/article/newTED_08.htm (accessed January 6, 2014).
MSG. n.d. Brand Equity – Meaning and Measuring Brand Equity, http://www.managementstudyguide.com/brand-equity.htm (accessed June 3, 2013).
Mullins, J. 2013. The New Business Road Test: What Entrepreneurs and Executives Should do Before Launching a Lean Start-Up. London: FT Publishing.
Nichols, W. March 2013. “Advertising Analytics 2.0.” Harvard Business Review, 91, no. 3, pp. 60–68.
Olenski, S. 2012. The Engagement Marketing Disconnect Between Consumers and Brands Rages On, http://www.forbes.com/sites/marketshare/2012/11/26/the-engagement-marketing-disconnect-between-consumers-and-brands-rages-on/ (accessed August 19, 2013).
Palmer, D.; S. Lunceford; and A.J. Patton. 2012. The Engagement Economy: How Gamification Is Reshaping Businesses, http://dupress.com/articles/the-engagement-economy-how-gamification-is-reshaping-businesses/ (accessed July 10, 2013).
Parasuraman, A.; V. Zeithaml; and L. Berry. Fall 1985. “A Conceptual Model of Service Quality and Its Implications for Future Research.” Journal of Marketing 49, no. 4, pp. 41–50.
Parnitzke, J. 2013. How to Build a Roadmap – Gap Analysis, http://pragmaticarchitect.wordpress.com/2013/06/11/how-to-build-a-roadmap-gap-analysis/ (accessed August 20, 2013).
Pearson Education. 2013. Culture: The Nature of Culture, http://www.infoplease.com/encyclopedia/society/culture-the-nature-culture.html (accessed September 6, 2013).
Perner, L. 2013. Segmentation, Targeting and Positioning, http://www.consumerpsychologist.com/cb_Segmentation.html (accessed October 7, 2013).
Personal.psu.edu. 2001. Roger’s Diffusion of Innovations, http://www.personal.psu.edu/users/w/x/wxh139/Rogers.htm (accessed October 9, 2013).
Point of Purchase Advertising International (POPAI). 2012. 2012 Shopper Engagement Study Media Topline Report. Chicago: The Global Association for Marketing at Retail, http://www.popai.fr/textes/Shopper_Engagement_Study.pdf (accessed March 11, 2014).
Pulse Group PLC. 2009. Consumer Brand Loyalty in a Recession Final, http://www.slideshare.net/bobchua/consumer-brand-loyalty-in-a-recession-final (accessed August 18, 2013).
Rogers, E.M. 1995. Diffusion of Innovations. 4th ed. New York, NY: The Free Press.
Ryan, M.; A. Sleigh; K.W. Soh; and Z. Li. 2013. Why Gamification is Serious Business, http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-why-gamification-is-serious-business.aspx (accessed July 10, 2013).
Sawtooth Software. n.d. What is Conjoint Analysis?, http://www.sawtoothsoftware.com/products/conjoint-choice-analysis/conjoint-analysis-software (accessed August 22, 2013).
Sawtooth Technologies. n.d. Perceptual Mapping, http://www.sawtooth.com/index.php/consulting/overview/perceptual-mapping (accessed August 22, 2013).
Shipham, S.O. 2010. “The MBA Research Process: Some Theoretical Considerations.” Management Today 28, no. 6, pp. 49–50.
Silverman, G. 2000. What to Do When Quantitative and Qualitative Research Contradict Each Other, http://www.quirks.com/articles/a2000/20001201.aspx?searchID=808886082&sort=9 (accessed September 10, 2013).
Smith, P.R. 2011. SOSTAC® Guide to Writing The Perfect Plan, www.prsmith.org; www.facebook.com/prsmithmarketing
Sorenson, L. 2011. 6 Core Benefits of Well-Defined Marketing Personas, http://blog.hubspot.com/blog/tabid/6307/bid/29583/6-Core-Benefits-of-Well-Defined-Marketing-Personas.aspx (accessed September 9, 2013).
Stevens, G. n.d. Product Lifecycle | Do You Know Where Your Business Is?, http://www.beasuccessfulentrepreneur.com/product-lifecycle-do-you-know-where-your-business-is/ (accessed December 31, 2013).
Stinson, J.E.; and W.A. Day. 1990. Developing Competitive Strategy, http://www.ouwb.ohiou.edu/stinson/Developing Strategy.html (accessed July 22, 2013).
Sunshine, J. 2012. 11 Brand Names That Sound Hilarious in a Different Language, http://www.huffingtonpost.com/2012/08/10/lost-in-translation-brands_n_1765812.html#slide=1362544 (accessed December 30, 2013).
Thomas, J.W. 1993. Product Testing, http://www.decisionanalyst.com/publ_art/prodtes1.dai (accessed July 10, 2013).
Thompson, R. n.d. Stakeholder Analysis: Winning Support for Your Projects, http://www.mindtools.com/pages/article/newPPM_07.htm (accessed August 20, 2013).
Wartzman, R. 2009. Authentic Engagement, Truly, http://www.businessweek.com/managing/content/dec2009/ca2009123_747440.htm (accessed October 7, 2013).
Wikimedia Commons. 2007. File:Servqual NL.gif, http://commons.wikimedia.org/wiki/File:Servqual_NL.gif?uselang=en-gb# (accessed January 7, 2014).
Wikipedia. 2012 a. Brand Equity, http://en.wikipedia.org/wiki/Brand_equity (accessed September 12, 2013).
Wikipedia. 2012 b. Ishikawa Diagram, http://en.wikipedia.org/wiki/Ishikawa_diagram (accessed October 7, 2013).
Wong, K.C. 2011. Using an Ishikawa Diagram as a Tool to Assist Memory and Retrieval of Relevant Medical Cases from the Medical Literature, http://www.jmedicalcasereports.com/content/5/1/120 (accessed October 9, 2013).
Zhang, K.Z.K.; C.M.K. Cheung; and M.K.O. Lee. 2012. “Online Service Switching Behavior: The Case of Blog Service Providers.” Journal of Electronic Commerce Research 13, no. 3, http://www.csulb.edu/journals/jecr/issues/20123/paper1.pdf (accessed January 20, 2014).
Zimmermann, A.; and C. Maennling. 2007. Mainstreaming Participation, http://www.fsnnetwork.org/sites/default/files/en-svmp-instrumente-akteuersanalyse.pdf (accessed October 13, 2013).
Additional Sources
Ballou, R.H. 2006. The Evolution and Future of Logistics and Supply Chain Management, http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0103-65132006000300002&lng=en&nrm=iso (accessed September 12, 2013).
Chronostrategy. n.d. ADL Matrix, http://chronostrategy.wikispaces.com/ADL+Matrix (accessed January 5, 2014).
Fruin, M. 2013. Competitive Strategy and Industry Environment, www.cob.sjsu.edu/fruin_m/Spring2013/ppt/chapter6.ppt (accessed July 20, 2013).
Gartner, Inc. 2011. Gartner Predicts Over 70 Percent of Global 2000 Organisations Will Have at Least One Gamified Application by 2014, http://www.gartner.com/newsroom/id/1844115 (accessed July 15, 2013).
Gurel-Atay, E.; G.-X. Xie; J. Chen; and L.R. Kahle. March 2010. “Changes in Social Values in the United States: 1976-2007 ‘Self-Respect’ Is on the Upswing as ‘A Sense of Belonging’ Becomes Less Important.” Journal of Advertising Research 50, no. 1, pp. 57–67.
Harquail, C.V. 2009. 7 Core Principles for Authentic Engagement, http://authenticorganizations.com/harquail/2009/05/11/7-core-principles-for-authentic-engagement/ (accessed October 6, 2013).
Hugos, M.H. 2011. Essentials of Supply Chain Management, 3rd ed. New York, NY: Wiley.
Kirkpatrick, D. 2011. B2B Gamification: Bold Strategy in Conservative Industry Increased Website Visits 108.5%, http://www.marketingsherpa.com/article/case-study/bold-strategy-in-conservative-industry (accessed July 16, 2013).
Kirkpatrick, D. 2012. Gamification: 6 Tactics for B2B Marketers, http://www.marketingsherpa.com/article/how-to/6-tactics-b2b-marketers (accessed July 10, 2013).
Lee, M. 2007. Book Summary: Crossing the Chasm by Geoffrey Moore, http://bizthoughts.mikelee.org/book-summary-crossing-the-chasm.html (accessed July 23, 2013).
Mullins, J. 2010 a. Markets and Industries: What’s the Difference and Why Does it Matter?, http://www.europeanbusinessreview.com/?p=2366 (accessed August 20, 2013).
Mullins, J. 2010 b. The New Business Road Test: What Entrepreneurs and Executives Should Do Before Writing a Business Plan. 3rd ed. London: Prentice Hall.
ODI. 2009. Planning Tools: Stakeholder Analysis, http://www.odi.org.uk/publications/5257-stakeholder-analysis (accessed August 20, 2013).
Olsen, Z. 2013. Product Adoption Curve Marketing, http://www.bydatabedriven.com/product-adoption-curve-marketing/ (accessed July 19, 2013).
Pressley, M.M. 2008. “Chapter 7: Competitive Strategy and the Industry Environment.” http://college.hmco.com/hjinstruct/powerpt/ch07/sld001.htm (accessed July 22, 2013). (Taken from Hill, C.W.L.; and G.R. Jones. 2008. Strategic Management: An Integrated Approach. Houghton Mifflin Company.)
Saltlane. 2009. Stakeholder Analysis http://www.saltlane.co.uk/Resources/stakeholder%20analysis.HTML (accessed August 20, 2013).
SCOR. 2013. What is SCOR?, http://supply-chain.org/scor (accessed September 15, 2013).
See also: www.newbusinessroadtest.com; www.johnwmullins.com
Supply Chain Management Institute. 2008. The Supply Chain Management Process, http://www.ijlm.org/Our-Relationship-Based-Business-Model.htm (accessed September 9, 2013). (The diagram comes from the book Lambert, D.M. 2008. Supply Chain Management: Processes, Partnerships, Performance, 3rd ed. Ponte Vedra Beach, FL: Supply Chain Management Institute .)
Toy, T. 2013. How To Develop a Killer Marketing Plan, Methods Used, General Rules, Six Key Steps, Business Models And Samples, http://tommytoy.typepad.com/tommy-toy-pbt-consultin/2013/04/how-to-develop-a-killer-marketing-plan-methods-used-general-rules-six-key-steps-business-models-and-samples.html (accessed August 23, 2013).
Walker, D.; A. Shelly; and L. Bourne. 2008. Influence, Stakeholder Mapping and Visualization, www.researchgate.net/publication/24078124_Influence_stakeholder_mapping_and_visualization/file/d912f (accessed August 20, 2013).
Wikipedia. 2013. Hofstede’s Cultural Dimensions Theory, http://en.wikipedia.org/wiki/Hofstede%27s_cultural_dimensions_theory (accessed September 2, 2013).
Willcocks, L.P.; S. Cullin; and M.C. Lacity. 2007. The Outsourcing Enterprise The CEO Guide to Selecting Effective Suppliers, http://www.outsourcingunit.org/publications/Selecting_Effective_Suppliers.pdf (accessed September 15, 2013).