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Performance Analysis Lecture by Murad Rattani Oxford College of London
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Performance Analysis Performance Analysis of a business or a company can be done by two methods: 1.Boston Consulting Group (BCG) 2.Product Life Cycle (PLC)
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Boston Consulting Group
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STARS Companies operating in higher industry growth rate with high market share. CASH COWS Companies operating in low industry growth rate with high market share.
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Boston Consulting Group QUESTION MARK Companies having low market share and high industry growth rate. DOGS Companies having low market share in a low industry growth rate industry.
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Product Life Cycle Stages of Product Life cycle 1.Introduction 2.Growth 3.Maturity 4.Decline
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Implications of Marketing Mix during different stages of PLC Introduction At this stage the company builds products awareness and develops the market for the product. Product: Branding and quality level is established. Property rights and trademarks are obtained.
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Introduction stage Price: either market penetration strategy or market skimming strategy is adopted Place: Distribution is selective Promotion: bring awareness and educate the market about the product. Mainly aimed at innovators and early adopters.
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Growth stage Growth To increase market share and build brand preference. Product: Quality is maintained and additional features may be added. Pricing: it is maintained as the firm enjoys less competition and increase in demand.
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Marketing Mix during Growth stage of PLC Place: Distribution channels increase as demand increases and customers accept the product. Promotion: aimed at broader audience.
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Maturity stage Maturity At this stage the sale diminishes. There is increased competition. The main aim of the company is to defend market share with profitability.
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Maturity stage Product: differences may be enhanced to differentiate the products with the competitors. Price: reduced because of competition
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Maturity stage Distribution: It may become intensive and incentives may be offered to build preference over competing products. Promotion: emphasizes over product differentiation
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Decline stage Decline At this stage, the sales decline as the product can either get obsolete or suffer reduced demand or lack of innovation.
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Decline stage During decline stage, the firm has got different options: Product development strategy Harvest the product: reduce the cost and continue to sell it to loyal or laggards customers. Divestment
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References Philip Kottler, Marketing Management, The Millennium Edition, 2000.Philip Kottler, Marketing Management, The Millennium Edition, 2000. www.bettermanagement.comwww.bettermanagement.comwww.bettermanagement.com www.valuebasedmanagement.netwww.valuebasedmanagement.netwww.valuebasedmanagement.net
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