Marketing simply means selling the right product at right price at the right place through right method of promotion to its customers. Pettinger stated that "Marketing is the competitive process by which goods and services are offered for consumption at a profit; this definition should be seen in the broadest possible terms. It is about building a reputation and making sales for cash and profits in particular markets" (Pg 162). To get customer satisfaction a firm needs to produce such product and services which have the right features, designs and every other thing that a customer wants. There are two different ways of marketing tools namely Product life cycle and Boston Consulting Group. Product Life Cycle is the process of managing the entire life cycle of a product from itsmaking, through design and manufacture to service and disposal. It is the chain of strategies used by business management as it (product) goes through its life cycle. Life cycle refers to the period from the first launch of the product into the market to its final life. The Boston consulting group matrix helps manages evaluate products and services of a business, strategies decision on investment can then be made. This essay will further compare and contrast about the product life cycle and Boston consulting group matrix as marketing tools.
The Product life Cycle
Everything has its own life period. Pettinger (1997) stated that “All products have a beginning, middle and an end” (Pg 176). In addition, the time period until which a product is attractive or appealing is the life of the product. Dransfield (2004) described that “initially a product may flourish and grow, the market will mature and finally, product will move towards decline and petrification” (Pg 328). There are four stages of the Product Life Cycle –
Introduction – In this period, growth is very and volume is very as because the product is new to the market and customers are not aware of the existence of the product in the market.
Growth – During this phase of the product, sales grow high and the demand for the product also rises. This is the period when the product makes maximum profit.
Maturity – While the product is taking off, at the end period of the growth stage, competitors enter the market in order to sell their own products. This is known as the maturity stage of the product. Sales become low during this stage of the product.
Decline – This is the phase when the product becomes unprofitable. Most of the product in this stage withdraws from the market.
Below is a figure of Stages of Product Life Cycle.
Sales Volume Growth Maturity Introduction Decline
BCG Matrix method
Boston Matrix method means considering and classifying the performance of a business in large firms and it also assesses the long-term capability or profitability of goods and market sectors.
“The Boston consulting group development seminal work on Categorizing product in a useful way that then enables the marketing department to decide appropriate strategies for product in different stages of product life cycle.”(p.262)
BCG Matrix supposes that if you enjoy a high market share (the proportion of the total market held by one company or product), you will be making profit and have scale economies that give you benefits. It shows “the market share of each of the firm’s products and the rate of growth of the markets in which they operate.” (p.179)
As you can see in the picture below, there are four main categories displayed in the portfolio of a company (Stars, Cash Cows, Dogs and Question marks) which try to identify the