1. What is a good strategy?

The key is developing a marketing strategy that forms a solid foundation for your promotional efforts. Implementing promotional activities such
as advertising, direct mail or even networking and one-to-one sales efforts without a marketing strategy is like buying curtains for a house you
are building before you have an architectural plan. How would you even know how many curtains to buy or what size they needed to be?

You can develop a strong marketing foundation by:

1. Defining your product or service: How is your product or service packaged? What is it that your customers are really buying? You may be
selling web-based software tools but your clients are buying increased productivity, improved efficiency and cost savings. And if you offer several
products or services which ones are the most viable to promote?

2. Identifying your target market: Everyone or anybody might be potential clients for your product. However, you probably dont have the time
or money to market to Everyone or Anybody. Who is your ideal customer? Who does it make sense for you to spend your time and money
promoting your service to? You might define your ideal customer in terms of income, age, geographic area, number of employees, revenues,
industry, etc. For example a massage therapist might decide her target market is women with household incomes of $75,000 or more who live in
the Uptown area.

3. Knowing your competition: Even if there are no direct competitors for your service, there is always competition of some kind. Something
besides your product is competing for the potential clients money. What is it and why should the potential customer spend his or her money with
you instead? What is your competitive advantage or unique selling proposition?

4. Finding a niche: Is there a market segment that is not currently being served or is not being served well? A niche strategy allows you to focus
your marketing efforts and dominate your market, even if you are a small player.

5. Developing awareness: It is difficult for a potential client to buy your product or service if they dont even know or remember it exists.
Generally a potential customer will have to be exposed to your product 5 to 15 times before they are likely to think of your product when the
need arises. Needs often arise unexpectedly. You must stay in front of your clients consistently if they are going to remember your product when
that need arises.

6. Building credibility: Not only must clients be aware of your product or service, they also must have a positive disposition toward it. Potential
customers must trust that you will deliver what you say you will. Often, especially with large or risky purchases, you need to give them the
opportunity to sample, touch, or taste the product in some way. For example, a trainer might gain credibility and allow potential customers to
sample their product by offering free, hour long presentations on topics related to their area of specialty.

7. Being Consistent: Be consistent in every way and in everything you do. This includes the look of your collateral materials, the message you
deliver, the level of customer service, and the quality of the product. Being consistent is more important than having the best product. This in
part is the reason for the success of chains. Whether youre going to Little Rock, Arkansas or New York City, if you reserve a room at a
Courtyard Marriott you know exactly what youre going to get.

8. Maintaining Focus: Focus allows for more effective utilization of the scarce resources of time and money. Your promotional budget will bring
you greater return if you use it to promote a single product to a narrowly defined target market and if you promote that same product to that
same target market over a continuous period of time.

2. List differences between a corporate strategy and business strategy.

Business-level strategies deal with a particular business unit while corporate strategies deal with the entire company, which
may consist of several business units.
Business-level strategies deal with specific issues, such as determining the price of the products, increasing sales or
introducing a new product.
Corporate strategies tend to be very broad and are focused on gaining a competitive advantage in the industry.
In most cases, corporate and business-level strategies tend to operate independent of each other
Corporate strategies will often affect business-level strategies. This is mainly done by allocating specific resources to
particular business units.

 Business-level strategies are very useful for solving practical problems while corporate strategies are useful for developing
long-term solutions for problems.

3. What is Value chain analysis? Why is it used?

Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your
customers.
In business, we're paid to take raw inputs, and to "add value" to them by turning them into something of worth to
other people. This is easy to see in manufacturing, where the manufacturer "adds value" by taking a raw material of
little use to the end user (for example, wood pulp) and converting it into something that people are prepared to pay
money for (e.g. paper). But this idea is just as important in service industries, where people use inputs of time,
knowledge, equipment, and systems to create services of real value to the person being served the customeAnd
remember that your customers aren't necessarily outside your organization: they can be your bosses, your coworkers, or the people who depend on you for what you do.Now, this is really important: in most cases, the more
value you create, the more people will be prepared to pay a good price for your product or service, and the more they
will keep on buying from you. On a personal level, if you add a lot of value to your team, you will excel in what you
do. You should then expect to be rewarded in line with your contribution.So how do you find out where you, your
team or your company can create value?
This is where the "Value Chain Analysis" tool is useful. Value Chain Analysis helps you identify the ways in which you
create value for your customers, and then helps you think through how you can maximize this value: whether through
superb products, great services, or jobs well done.

4. Explain SWOT analysis.

A SWOT analysis is typically conducted using a four-square SWOT analysis template, but you could also just
make a lists for each category. Use the method that makes it easiest for you to organize and understand the
results.
I recommend holding a brainstorming session to identify the factors in each of the four categories. Alternatively,
you could ask team members to individually complete our free SWOT analysis template, and then meet to
discuss and compile the results. As you work through each category, dont be too concerned about elaborating at
first; bullet points may be the best way to begin. Just capture the factors you believe are relevant in each of
the four areas.
Once you are finished brainstorming, create a final, prioritized version of your SWOT analysis, listing the
factors in each category in order from highest priority at the top to lowest priority at the bottom.

Strengths (internal, positive factors)

Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within
your control.

What do you do well?

What internal resources do you have? Think about the following:

o

Positive attributes of people, such as knowledge, background, education, credentials, network,

reputation, or skills.

Tangible assets of the company, such as capital, credit, existing customers or distribution
channels, patents, or technology.

What advantages do you have over your competition?

Do you have strong research and development capabilities? Manufacturing facilities?

What other positive aspects, internal to your business, add value or offer you a competitive advantage?

Weaknesses (internal, negative factors)

Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive
disadvantage. You need to enhance these areas in order to compete with your best competitor.

What factors that are within your control detract from your ability to obtain or maintain a competitive
edge?

What areas need improvement to accomplish your objectives or compete with your strongest
competitor?

What does your business lack (for example, expertise or access to skills or technology)?

Does your business have limited resources?

Is your business in a poor location?

Opportunities (external, positive factors)

Opportunities are external attractive factors that represent reasons your business is likely to prosper.

What opportunities exist in your market or the environment that you can benefit from?

Is the perception of your business positive?

Has there been recent market growth or have there been other changes in the market the create an
opportunity?

Is the opportunity ongoing, or is there just a window for it? In other words, how critical is your timing?

Threats (external, negative factors)

Threats include external factors beyond your control that could place your strategy, or the business itself, at
risk. You have no control over these, but you may benefit by having contingency plans to address them if they
should occur.

Who are your existing or potential competitors?

What factors beyond your control could place your business at risk?

Are there challenges created by an unfavorable trend or development that may lead to deteriorating
revenues or profits?

What situations might threaten your marketing efforts?

Has there been a significant change in supplier prices or the availability of raw materials?

What about shifts in consumer behavior, the economy, or government regulations that could reduce
your sales?

Has a new product or technology been introduced that makes your products, equipment, or services
obsolete?

5. What is meant by Pricing Strategy?

A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions,
trade margins and input costs, amongst others.
Definition: Price is the value that is put to a product or service and is the result of a complex set of
calculations, research and understanding and risk taking ability. A pricing strategy takes into account
segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst
others. It is targeted at the defined customers and against competitors.
Description: There are several pricing strategies:
Premium pricing: high price is used as a defining criterion. Such pricing strategies work in segments and
industries where a strong competitive advantage exists for the company. Example: Porche in cars and
Gillette in blades.
Penetration pricing: price is set artificially low to gain market share quickly. This is done when a new
product is being launched. It is understood that prices will be raised once the promotion period is over
and market share objectives are achieved. Example: Mobile phone rates in India; housing loans etc.
Economy pricing: no-frills price. Margins are wafer thin; overheads like marketing and advertising costs
are very low. Targets the mass market and high market share. Example: Friendly wash detergents;
Nirma; local tea producers.
Skimming strategy: high price is charged for a product till such time as competitors allow after which
prices can be dropped. The idea is to recover maximum money before the product or segment attracts
more competitors who will lower profits for all concerned. Example: the earliest prices for mobile
phones, VCRs and other electronic items where a few players ruled attracted lower cost Asian players.

6. Analyze Porter's five forces regulating Industry attractiveness.

According to Porter, the origin of profitability is identical regardless of industry. In that light,
industry structure is what ultimately drives competition and profitability not whether an
industry produces a product or service, is emerging or mature, high-tech or low-tech,
regulated or unregulated.
"If the forces are intense, as they are in such industries as airlines, textiles, and hotels, almost
no company earns attractive returns on investment," Porter wrote. "If the forces are benign,
as they are in industries such as software, soft drinks, and toiletries, many companies are
profitable."
Understanding the Five Forces
Porter regarded understanding both the competitive forces and the overall industry structure
as crucial for effective strategic decision-making. In Porter's model, the five forces that shape
industry competition are:
Competitive rivalry. This force examines how intense the competition currently is in the
marketplace, which is determined by the number of existing competitors and what each is
capable of doing. Rivalry competition is high when there are just a few businesses equally
selling a product or service, when the industry is growing and when consumers can easily
switch to a competitors offering for little cost. When rivalry competition is high, advertising and
price wars can ensue, which can hurt a business's bottom line. Rivalry is quantitatively
measured by the Concentration Ratio (CR), which is the percentage of market share owned
by the four largest firms in an industry.
Bargaining power of suppliers. This force analyzes how much power a business's supplier
has and how much control it has over the potential to raise its prices, which, in turn, would
lower a business's profitability. In addition, it looks at the number of suppliers available: The
fewer there are, the more power they have. Businesses are in a better position when there
are a multitude of suppliers. Sources of supplier power also include the switching costs of
firms in the industry, the presence of available substitutes, and the supply purchase cost
relative to substitutes.
Bargaining power of customers. This force looks at the power of the consumer to affect
pricing and quality. Consumers have power when there aren't many of them, but lots of
sellers, as well as when it is easy to switch from one business's products or services to
another. Buying power is low when consumers purchase products in small amounts and the
seller's product is very different from any of its competitors.
Threat of new entrants. This force examines how easy or difficult it is for competitors to join
the marketplace in the industry being examined. The easier it is for a competitor to join the
marketplace, the greater the risk of a business's market share being depleted. Barriers to

entry include absolute cost advantages, access to inputs, economies of scale and wellrecognized brands.
Threat of substitute products or services. This force studies how easy it is for consumers
to switch from a business's product or service to that of a competitor. It looks at how many
competitors there are, how their prices and quality compare to the business being examined
and how much of a profit those competitors are earning, which would determine if they have
the ability to lower their costs even more. The threat of substitutes are informed by switching
costs, both immediate and long-term, as well as a buyer's inclination to change.

7. What are the benefits of Market Segmentation?

Benefit #1: More Efficient Advertising
This is the most obvious benefit. If you take a large, unwieldy market and segment it into
manageable pieces, advertising is going to be both easier and more effective. When you segment a
market, you simultaneously segment marketing options. You can now choose websites, magazines,
TV stations, etc. that are tailored to each market. For example, Apple probably does not market the
5C during the OReilly Factor. Simply put, segmenting the market makes it easier to advertise to
your target audience. Read this blog post on advertising strategies to learn how to promote
your product or service .
Benefit #2: New Segment, New Focus
Not all segments are divided to suit pre-existing products. Much of the time the product is
reimagined to fit a new market segment. If a company can spot this segment early, then it can alter
its focus for more effective results. In this way, a companys entire strategy, from designing a new
product to creating a marketing objective to complement it, is based on a new segment and new,
narrower focus.
Food and beverage companies are almost unanimously focusing on healthy alternatives to preexisting products. Of course, these companies did not all of a sudden change their minds about
what kinds of products they pride themselves on; they merely shifted their focus in the hopes of
better returns.
Vital to the success of a new focus is ensuring that the focus is legitimate, lasting and proven to be
profitable. Join this Market Research Classroom to learn how to analyze and tap into the most
lucrative markets.
Benefit #3: Concentrated Distribution

When your focus narrows, so do your channels of distribution. It might seem counter-intuitive that
when your decrease market size by segmenting it, you are able to increase distribution. Further,
how it this possible when you also must decrease the overall number of distribution channels? The
idea is that once you figure out the high-density areas of customer interest, you can eliminate
ineffective distribution channels and use these new, freed-up resources to pump those outlets that
receive the greatest amount of traffic.
Less, but more powerful, distribution channels is a beautiful thing.
Benefit #4: Precise Branding
Once the market is segmented, you can hit the nail on the head when it comes to branding. Every
aspect of your company and its products can be tailored to meet the customers demands: design,
customer service, price, quality, etc. If you know anything about fashion, you know that a lot of the
high-end designers have several brands. Marc Jacobs uses his Marc Jacobs brand to sell those
who can afford the best; he uses Marc by Marc Jacobs to sell to those in the middle, those who
want a designer brand but cannot regularly afford the cost; finally, he uses Jacobs by Marc by Marc
Jacobs (this is getting ridiculous, right?) to sell to just about anyone who desires a designer name.
Learn how to brand yourself like Marc Jacobs with this big brand strategy course for small
brands.
Whats genius about Mr. Jacobs is that he preserves the pristine quality associated with his name
by having just his name represent the highest product line. Not only does he not tarnish his name
by releasing a cheaper line under the name Marc, he creates competition within his company;
fashionistas will see the Marc Jacobs line as a status symbol, and therefore must have it. So
instead of selling all ranges of quality under one name, Marc Jacobs segments the market and this
allows him to have very precise branding.
Get free brand advice from this article on brand visibility and attracting your exact target
audience.
Benefit #5: Increase In Sales
This is the one weve all been waiting for. Yes, increases in sales are more than possible with
market segmentation, but there is one thing to consider first: you are bound to lose some customers
when you narrow your boundaries. Its inevitable. For this reason, immediate sales may drop. But if
you devised an intelligent plan, you will soon boost sales in your target audience thanks to many of
the benefits listed above. And once youve established yourself as a leader in your segmented
market, you will begin stealing customers from the competition. If thats your objective, you cant

miss this sales hacking introduction with advice from CEOs and VPs from Google, Adobe,
Salesforce, Hubspot, and others .
Samsung has accomplished just that by beating Apple at its own game; by marketing heavily to
young and cool customers, Samsung has taken over the smartphone market (this is what Apple did
initially, and in retrospect it never should have adopted an all-encompassing marketing strategy,
because pretty much everyone wants to use a product marketed to the young and cool).
Benefit #6: Customer Retention
Customer retention is accomplished in two ways. First, lets look at the Marc Jacobs fashion
example again. As we know, Mr. Jacobs has segmented the market into three primary categories:
affordable, mid-range, and high-end. By so doing, he has created a product for just about anyone. A
young professional who is just getting started might be able to purchase one of his affordable items.
Down the road, once this professional has attained some degree of success, he or she might opt for
the mid-range or high-end option.
This is class movement right before our eyes. Mark Jacobs has a product not only for every person,
but for every stage of life (although you are less likely to see someone fall from grace and go from
buying high-end Marc Jacobs to Jacobs by Marc by Marc Jacobs). Not happening.
Second, customer retention is achieved through increasing competitiveness. That is, you are
making yourself more competitive by narrowing (a.k.a. increasing) your focus. Brand loyalty directly
results from association; DC Shoe company will forever (or just about) be associated with the youth
skateboarding/snowboarding movement. Because DC makes quality products, there is no reason
for someone to grow up and out of the brand; it then becomes associated primarily through sport
and quality.
Even if customer retention has never been your forte, you can use this tactical guide to customer
development for entrepreneurs to establish, and retain, a commercial advantage through market
segmentation.

8. What is Opportunity Assessment?

An opportunity assessment plan is NOT a business plan. Compared to a business
plan, it should:
a. Be shorter
b. Focus on the opportunity, not the venture
c. Have no computer-based spreadsheet
d. Be the basis to make the decision on whether to act on an opportunity or wait until
another, better opportunity comes along
It should include:

1. A description of the product or service

i. What is the market need for the product or service?
ii. What are the specific aspects of the product or service (include any
copyright, patent or trademark information)?
iii. What competitive products are available filling this need?
iv. What are the competitive companies in this product market space? Describe
their competitive behavior.
a. What are the strengths and weaknesses of each of your competitors?
b. What are the unique selling propositions of this product or service?
c. What are the NAIC and SIC codes for this product or service?
d. What is the mission of the new venture?
e. What development work has been completed to date?
f. What patents might be available to fulfill this need?
2. An assessment of the opportunity:
a. What market need does it fill?
b. What is the size and past trends of this market?
c. What is the future growth and characteristics of this market?
d. What social condition underlines this market need?
e. What market research data can be marshaled to describe this market need?
f. What does the international market look like?
g. What does international competition look like?
h. What are total industry sales over the past five years?
i. What is anticipated growth in this industry?
j. How many new firms have entered this industry in the past three years?
k. What new products have been recently introduced in this industry?
l. What is the profile of your customers?
m. Where is the money to be made in this activity? (The activity that interests you most
may be just off center from where the money to be made from this opportunity will be
located.)
3. Entrepreneurial self-assessment and the entrepreneurial team:
a. Why does this opportunity excite you?
b. What are your reasons for going into business?
c. Why will this opportunity sustain you once the initial excitement subsides?
d. How does it fit into your background and experience?
e. What experience do you have and/or will you need to successfully implement the
business plan?
f. Why will you be successful in this venture?
4. What needs to be done to translate this opportunity into a viable venture?
a. Examine each critical step.
b. Then think about the sequence of activity and put these critical steps into some
expected sequential order.
c. How much time and how much money will each step require?
d. If you cannot self-finance, where would you get the needed capital?

9. List components of a Marketing Plan.

Here are the essential components of a marketing plan that keeps the sales pipeline full.
1. Market research. Research is the backbone of the marketing plan. Your local library is a
great place to start, offering reports like Standard & Poors or IBISWorld. Some library cards
even allow access to online services from home. Identify consumer buying habits in the
industry, market size, market growth or decline, and any current trends.
2. Target market. A well-designed target market description identifies your most likely buyers.
In addition, you should discuss at least two or three levels of segmentation. A language
tutoring business might target both students and foreign-born employees who want to
improve their English.

3. Positioning. What is the perception of your brand in the marketplace? For example, if your
restaurant sells burgers, do customers see you as the place to go for gluten-free or healthy
options or the place to go if youve got an appetite for a double cheeseburger? The difference
in how the target market sees you is your positioning. Develop compelling branding and
marketing messages that clearly communicate how you want to be perceived.
4. Competitive analysis. You need to know who your competitors are and how your products
and services are different. What is the price point at which your competitors are selling, and
what segment of the market are they aiming to reach? Knowing the ins and outs of your
competitors will help you better position your business and stand out from the competition.
5. Market strategy. Your marketing strategy is your path to sales goals. Ask yourself How will
I find and attract my most likely buyers? This is the core of what the strategy should explain.
It should look at the entire marketplace and then break down specific tactics including such as
events, direct mail, email, social media, content strategy, street teams, couponing, webinars,
seminars, partnerships, and other activities that will help you gain access to customers.
6. Budget. Develop a month-by-month schedule of what you plan to spend on marketing. Also
include a red light decision point. For each activity, establish a metric that tells you to stop if
its not generating sufficient return on investment (ROI).
7. Metrics. Track your marketing success with Google Analytics for website conversions and a
simple Excel sheet to compare your budget against the actual ROI. Test programs over the
course of a 30- to 60-day period, and evaluate the results. Repeat any programs that are
delivering sales or sign-ups to your email list, and get rid of anything thats not.

10. Why is ANSOFF's matrix used? Explain the Matrix.

Every business owner wants to grow their business but it is often difficult to determine
the best way forward. Here is a straightforward description of four different growth
strategies and an explanation of how to determine which is best for your business.
Igor Ansoff suggested that business owners ability to grow their businesses comes down to
how they market new or existing products in new or existing markets. He outlines four distinct
strategies:
- Market Penetration selling more of the same things to more of the same customers
- Market Development selling more of the same things to different customers
- Product Development selling new products or services to the same customers
- Diversification selling new products or services to different customers
Using Ansoffs matrix, business owners can evaluate each of the growth strategies in turn to
assess which is likely to result in the best possible return.
Market Penetration
Market penetration is the easiest way to grow in an expanding market. However, it becomes
more difficult as the market matures and competition increases.
The obvious step is to increase advertising or add more sales people to increase
sales. Alternatively, business owners can win business from competitors through competitive

pricing, discounting, vouchers or other offers. Business owners can also boost sales by
providing additional incentives to sales staff through commissions, bonuses or other reward
schemes or by introducing customer loyalty schemes.
But market penetration can also be increased by initiatives that increase usage. Look, for
example, at how toothpaste manufacturers increased usage by introducing pump-action
toothpaste dispensers that dispense a fixed quantity of toothpaste. Research has also shown
that the size of the toothbrush head influences the amount of toothpaste used, so the bigger
the toothbrush head, the more toothpaste we use. Manufacturers of health yogurts emphasise
the importance of daily consumption. Manufacturers of snack foods that are considered bad
for you have introduced fat free or low fat versions to counter a
trend towards reduced consumption.
Finally, market penetration can be increased by developing new applications. Look at how
breakfast cereal makers also promote their products as bedtime snacks.
Market Development
Market development is a riskier strategy and is most appropriate where the core competence
of the business is the product or service. A good example is a business providing IT support
to small office/home office users. The business growth strategy may be to target larger
offices, small and medium enterprises and eventually large multinational companies.
One way to develop the market is to introduce new sales and distribution channels. The most
obvious example is to move online and use the Internet to promote and sell products. But
markets can also be developed through more traditional means such as developing a
strategic partnership with a business that already operates in the target market. New
geographical markets can be developed by setting up shops, warehouses or offices in the
target areas. Many businesses have adopted the franchise model to access new
geographical markets.
An interesting alternative is to develop new markets by finding alternative uses for existing
products. Johnson and Johnson repositioned baby shampoo to appeal to the female market
by emphasising its gentle, sensitive properties. Manufacturers have repositioned
concentrated drinks such as MiWadi to appeal to the health-conscious adult market by
promoting it as a flavour to add to the recommended daily water consumption.
Product Development
Developing new products for an existing market is also more risky than market penetration. It
is often most appropriate where the strength of the business lies in its relationship with
customers. A good example is an accountancy practice. Client retention is high and clients
are unlikely to be attracted away from other practices, so the most effective means to grow
the business is to develop new products for the existing client base. The more progressive
accountancy practices now offer business advice, tax consultancy, wealth management
advice, succession planning and many other services in addition to traditional accounting and
audit activities. In a similar way, many traditional printers have expanded to offer office
stationery and office furniture.
Many product based businesses can add complementary services, for example equipment
suppliers can add maintenance and repair services, and service based businesses can add
products to increase sales.

An alternative growth strategy is to start to carry out activities further back up the supply
chain, so distributors may add warehousing, wholesaling or even importing activities that
increase the scale of the business while maintaining the same customer base.
Diversification
Diversification is the most risky strategy since it involves two unknowns: new products with
unknown development problems and new markets with unknown characteristics. But it can
offer the best potential for growth.
The most common way for a business to diversify is to develop new products that take
advantage of the core competencies of the organisation. Examples include how Richard
Branson has taken advantage of the Virgin brand and diversified into entertainment, air and
rail travel, foods etc. and how EasyJet have diversified into hotels, offices, car rental, gyms,
fastfood and a wide range of other goods and services.
Alternatively, a business can diversify by acquiring another business that operates in a
separate market.

11. Explain BCG Matrix.

To create a BCG matrix, businesses gather market-share and growth-rate data on their business units
or products. One large square is drawn and is divided into four equal quadrants. Along the top of the
box, a market share or cash generation is written, and a growth rate or cash use is written down the
left side. On the top left is high market share, and low market share is on the left. On the left-hand
side, high cash use is at the top and low cash use or growth rate is at the bottom.
Within the diagram, "stars" go in the upper-left quadrant, and "question marks" are put in the upperright square. At the bottom, "cash cows" go on the left, and "dogs" are placed on the right. The
diagram visually shows that stars have high market share and a high growth rate, while question
marks have low market share and a high growth rate. On the bottom, cash cows have a low growth
rate but a high market share, and dogs have a low market share and a low growth rate.

The following ideas apply to each quadrant of the matrix:

Stars: The business units or products that have the best market share and generate the most cash
are considered stars. Monopolies and first-to-market products are frequently termed stars. However,
because of their high growth rate, stars also consume large amounts of cash. This generally results in
the same amount of money coming in that is going out. Stars can eventually become cash cows if
they sustain their success until a time when the market growth rate declines. Companies are advised
to invest in stars.
Cash cows: Cash cows are the leaders in the marketplace and generate more cash than they
consume. These are business units or products that have a high market share, but low growth
prospects. According to NetMBA, cash cows provide the cash required to turn question marks into
market leaders, to cover the administrative costs of the company, to fund research and development,
to service the corporate debt, and to pay dividends to shareholders. Companies are advised to invest
in cash cows to maintain the current level of productivity, or to "milk" the gains passively.

Dogs: Also known as pets, dogs are units or products that have both a low market share and a low
growth rate.They frequently break even, neither earning nor consuming a great deal of cash. Dogs are
generally considered cash traps because businesses have money tied up in them, even though they
are bringing back basically nothing in return. These business units are prime candidates for
divestiture.
Question marks: These parts of a business have high growth prospects but a low market share.
They are consuming a lot of cash but are bringing little in return. In the end, question marks, also
known as problem children, lose money. However, since these business units are growing rapidly,
they do have the potential to turn into stars. Companies are advised to invest in question marks if the
product has potential for growth, or to sell if it does not.
As BCG founder Bruce Henderson wrote in 1968, "all products eventually become either cash cows
or pets [dogs]. The value of a product is completely dependent upon obtaining a leading share of its
market before the growth slows."
Once a company plots out its matrix, it can begin to further analyze its products'potential.
Understanding cash flow
To understand the elements of the Boston matrix, companies should be mindful of the sources of cash
flow. Henderson wrote that four rules are responsible for product cash flow:

Margins and cash generated are a function of market share. High margins and high market
share go together.

Growth requires cash input to finance added assets. The added cash required to hold share is
a function of growth rates.

High market share must be earned or bought. Buying market share requires an additional
increment or investment.

No product market can grow indefinitely. The payoff from growth must come when the growth
slows, or it never will. The payoff is cash that cannot be reinvested in that product.

12. Explain the different stages of Product Life cycle. Also, explain how elements of
marketing mix differ from one stage to another.

Product Life Cycle Stages

As consumers, we buy millions of products

every year. And just like us, these products have a life cycle. Older, long-established products
eventually become less popular, while in contrast, the demand for new, more modern goods usually
increases quite rapidly after they are launched.
Because most companies understand the different product life cycle stages, and that the products
they sell all have a limited lifespan, the majority of them will invest heavily in new product
development in order to make sure that their businesses continue to grow.
The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean
different things for business that are trying to manage the life cycle of their particular products.
Introduction Stage This stage of the cycle could be the most expensive for a company launching a
new product. The size of the market for the product is small, which means sales are low, although
they will be increasing. On the other hand, the cost of things like research and development,
consumer testing, and the marketing needed to launch the product can be very high, especially if its a
competitive sector.
Growth Stage The growth stage is typically characterized by a strong growth in sales and profits,
and because the company can start to benefit from economies of scale in production, the profit
margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to
invest more money in the promotional activity to maximize the potential of this growth stage.
Maturity Stage During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up. This is probably the most
competitive time for most products and businesses need to invest wisely in any marketing they
undertake. They also need to consider any product modifications or improvements to the production
process which might give them a competitive advantage.
Decline Stage Eventually, the market for a product will start to shrink, and this is whats known as
the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the
customers who will buy the product have already purchased it), or because the consumers are
switching to a different type of product. While this decline may be inevitable, it may still be possible for
companies to make some profit by switching to less-expensive production methods and cheaper
markets.

13. A MNC is planning to enter Indian Market, explain Why is it important to analyze
environment before entering. Substantiate the explanation using examples.

14. What is the impact of internet and social media in Marketing ? As a result, how
companies should form strategies to capture market ?
15. Explain any four Pricing Strategies with examples.
16. Frame two Marketing Goals of an MNC entering India.