Have you carried out an audit of your products and services recently?
The BCG – Boston Consulting Group Matrix is a useful tool to help you audit your products and services and determine if the demand is growing or declining. Sometimes we attach too much sentimental value to the things we sell and this can affect our productivity and revenue. This can also lead to a lot of clutter in our marketing campaign and less effective results.
Components of Your Product Checklist
The BCG Matrix consists of the Star, the Dog, the Cow and the Question Mark, I know it sounds like an odd mix. This matrix helps businesses (big and small) determine growth market share and how to maximise the product cycle of each product/service.
Have you got a star product? Maybe you have an edge in the industry based on this product i.e. a high market share with high growth rate. You happen to launch your product/service when there was high demand for what you offer, so now you are at the star of the show. Remember your product or service will not be a star forever, so consider how best you can maximise the positioning of this product/service for your business. Soon enough stars become dogs if you do not look after your customers and keep reinventing your product offering.
You need at least one cash cow in your portfolio of products or services. This is the product or service most of your clients tend to buy from you. These products/services are highly profitable and you happen to in the forefront of the pack of a slow growth rate industry i.e. you are able to maintain a high market share for a while. The revenue from cash cows is what you use to fund other products/services in your offerings. Be careful that your cash cow revenue is used wisely and not spend servicing a ‘dog product’.
Just as the name indicates, question marks are the products/services you have in your mix that exist in an extremely competitive market. This may be a product you recently launched, that is slowly gaining market share in the industry. Questions mark products/services need perseverance and a good marketing strategy – this is assuming you have done your market research from the beginning. New products/services do not just sell, you need to gain the trust of your potential customers and you can only do that if you persistently engage and court with them.
The dog refers to products/services that no longer make a profit and just exist to boost the product mix. Despite all attempts to make it work, this low market share product/service resides permanently in a low growth market and probably on its way out. You have the choice to discontinue or revamp your ‘dog’ product/ service. I surely do not believe all products or services in this category need to face the dump, some still have a new lease of life in them if we care to find it.
So where are your products and services in this matrix? Are your stars still twinkling? How much longer can you milk your cash cows? Are you confident that your questions marks will be the solution to your customers ‘quest? Finally, can the tired dog be revived or its time to say goodbye?
Audit your products and services so you can spend your time on what truly matters and what will propel your business forward.
Enjoy the journey.
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