1. The Marketing Mix: Product
Product Portfolio Analysis - Boston Matrix
Today you will know how the a product portfolio analysis is.
You will understand the Boston Matrix and its use in marketing decision making.
You will be able to apply this theory and understanding to the ASOS.com case study.

2. Product Portfolio Analysis The Boston Matrix
Some businesses have a wide range of products that they offer their customers. This is known as a product portfolio.
Each product has a lifespan, therefore businesses must be aware of where all their products are in their lifespan to manage their product portfolio.
One way a business can manage their product portfolio is to look at a tool called the Boston Matrix.

3. Product Portfolio Analysis The Boston Matrix
The Boston Matrix is a tool that can be used to compare products of a business and to work out how well they are doing.
The Boston Matrix considers market share and the rate of growth in the market a product is operating in.
A product portfolio is the range of products a business may sell
e.g. Unilever owns Slim-Fast, Birdseye, Hellmans, Dove, Comfort and many more
As part of the planning process a firm needs to examine the position of its product in the market and this is product portfolio analysis.

4. Product Portfolio Analysis The Boston Matrix
In the matrix are the links to the stages in the life cycle of each type of product in the Boston matrix
Growth
Introduction
Maturity
Decline

5. Product Portfolio Analysis The Boston Matrix
The Boston Matrix – Dogs
Low market share in low growth markets
These firms do not generate cash
Firms may want to get rid of such products
May be held for strategic reasons e.g. to maintain market share
E.g. Video recorders

6. Product Portfolio Analysis The Boston Matrix
The Boston Matrix – Cash Cows
High market share in a slow growing market
Often mature products with well established producers
They generate more income for the business than is invested
Little room in market for further growth
Much of the promotion is already done
Good product awareness in the market for the product
May become dogs
Money generated from cash cows is used to fund a companies other star and problem child products to help them succeed (milking)
E.g. Heinz Baked Beans, Nescafe Original

7. The Boston Matrix – Stars
Product Portfolio Analysis The Boston Matrix
The Boston Matrix – Stars
Large share of a fast growing market
Highly successful products which may generate high incomes
Usually expensive to market/promote
Money needs to be spent to ensure it retain its position in the market, to stay ahead of competition
The aim is to develop into a cash cow
E.g. Apple I-pod

8. The Boston Matrix – Problem Child
Product Portfolio Analysis The Boston Matrix
The Boston Matrix – Problem Child
Small market share in a fast growing market
Products may be a success or they may fail - very vulnerable
Generate little income
Products have an uncertain future
Need large investment in marketing to create awareness and brand image
Mostly new products onto a market
E.g. Microsoft X-box when it was launched in 2001

9. Criticisms of the Boston Matrix
Product Portfolio Analysis The Boston Matrix
Criticisms of the Boston Matrix
It is over simplified model not suitable for all product types
Profit is not always directly related to high market share e.g. Boeing launching a new aeroplane, it gains high market share quickly but has large development costs to cover
Diverting money made from cash cow products (milking) and not invested back into it to continue promoting may make it lose its competitive advantage

10. The Product Life Cycle & The Boston Matrix Case Study: ASOS.com
Read through the case study then complete the questions below:
What is meant by the term ‘Product Lifecycle’ (2 marks)
What is meant by the term ‘Product Portfolio’ (2 marks)
What is meant by the term ‘Boston Matrix’ (2 marks)
What is the core purpose of ASOS.com? (2 marks)
Describe the marketing mix of ASOS.com. (8 marks)
Draw and label the stages of the product lifecycle for ASOS.com’s own label products. (12 marks)
Analyse how the product lifecycle gives ASOS.com greater control over their business operations. (8 marks)
Describe how ASOS.com measure the effectiveness of their promotional activities. (6 marks)
Describe ASOS.com’s approach to promoting their products. (6 marks)
Discuss the factors ASOS.com should consider when deciding whether to spend more on promoting particular products? (8 marks)
Refer to the Boston Matrix and the product lifecycle when answering this question.
Total Marks: 56