Definition:

Philip Kotler defines marketing as :-marketing is about Satisfying needs and

wants through an exchange process. The Chartered Institute
of Marketing defines marketing as "the management process responsible for
identifying, anticipating and satisfying customer requirements profitably."

Marketing: Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.

Definition of Marketing - American Marketing Association

BCG matrix

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 (or growth-share matrix) is a corporate planning tool, which is used to portray
firm’s brand portfolio or SBUs on a quadrant along relative market share axis
(horizontal axis) and speed of market growth (vertical axis) axis.
Growth-share matrix

is a business tool, which uses relative market share and industry growth rate
factors to evaluate the potential of business brand portfolio and suggest
further investment strategies.

Understanding the tool

BCG matrix is a framework created by Boston Consulting Group to evaluate the
strategic position of the business brand portfolio and its potential. It classifies
business portfolio into four categories based on industry attractiveness (growth rate
of that industry) and competitive position (relative market share). These two
dimensions reveal likely profitability of the business portfolio in terms of cash needed
to support that unit and cash generated by it. The general purpose of the analysis is
to help understand, which brands the firm should invest in and which ones should be
divested.

Relative market share. One of the dimensions used to evaluate business portfolio is
relative market share. Higher corporate’s market share results in higher cash returns.
This is because a firm that produces more, benefits from higher economies of scale
and experience curve, which results in higher profits. Nonetheless, it is worth to note
that some firms may experience the same benefits with lower production outputs and
lower market share.

Market growth rate. High market growth rate means higher earnings and
sometimes profits but it also consumes lots of cash, which is used as investment to
stimulate further growth. Therefore, business units that operate in rapid growth
industries are cash users and are worth investing in only when they are expected to
grow or maintain market share in the future.

There are four quadrants into which firms brands are classified:

Dogs. Dogs hold low market share compared to competitors and operate in a slowly
growing market. In general, they are not worth investing in because they generate
low or negative cash returns. But this is not always the truth. Some dogs may be
profitable for long period of time, they may provide synergies for other brands or
SBUs or simple act as a defense to counter competitors moves. Therefore, it is
always important to perform deeper analysis of each brand or SBU to make sure
they are not worth investing in or have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation

Cash cows. Cash cows are the most profitable brands and should be “milked” to
provide as much cash as possible. The cash gained from “cows” should be invested
into stars to support their further growth. According to growth-share matrix,
corporates should not invest into cash cows to induce growth but only to support

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them so they can maintain their current market share. Again, this is not always the
truth. Cash cows are usually large corporations or SBUs that are capable of
innovating new products or processes, which may become new stars. If there would
be no support for cash cows, they would not be capable of such innovations.

Strategic choices: Product development, diversification, divestiture, retrenchment

Stars. Stars operate in high growth industries and maintain high market share. Stars
are both cash generators and cash users. They are the primary units in which the
company should invest its money, because stars are expected to become cash cows
and generate positive cash flows. Yet, not all stars become cash flows. This is
especially true in rapidly changing industries, where new innovative products can
soon be outcompeted by new technological advancements, so a star instead of
becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration,
market development, product development

Question marks. Question marks are the brands that require much closer
consideration. They hold low market share in fast growing markets consuming large
amount of cash and incurring losses. It has potential to gain market share and
become a star, which would later become cash cow. Question marks do not always
succeed and even after large amount of investments they struggle to gain market
share and eventually become dogs. Therefore, they require very close consideration
to decide if they are worth investing in or not.
Strategic choices: Market penetration, market development, product development,
divestiture

Advantages and disadvantages

Benefits of the matrix:

 Easy to perform;
 Helps to understand the strategic positions of business portfolio;
 It’s a good starting point for further more thorough analysis.

Growth-share analysis has been heavily criticized for its oversimplification and lack
of useful application. Following are the main limitations of the analysis:

 Business can only be classified to four quadrants. It can be confusing to classify an SBU that
falls right in the middle.
 It does not define what ‘market’ is. Businesses can be classified as cash cows, while they are
actually dogs, or vice versa.
 Does not include other external factors that may change the situation
completely.
 Market share and industry growth are not the only factors of profitability.
Besides, high market share does not necessarily mean high profits.
 It denies that synergies between different units exist. Dogs can be as
important as cash cows to businesses if it helps to achieve competitive
advantage for the rest of the company.

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Michael Volkov, Gary Armstrong, Philip Kotler

Publication Date: 24/08/2017

ISBN:
9781488611841
Category:
Sales & marketing
Format:
Paperback / softback
Publication Date:
24-08-2017
Publisher:
Pearson Education Australia
Country of origin:
Australia
Edition:
7th Edition
Pages:

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 550

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A flagship marketing resource that provides an introduction to marketing concepts,
strategies and practices with a balance of depth of coverage and ease of learning.
Principles of Marketing keeps pace with a rapidly changing field, focussing on the
ways brands create and capture consumer value. Practical content and linkage are
at the heart of this edition. Real local and international examples bring ideas to life
and new feature ‘linking the concepts’ helps students test and consolidate
understanding as they go.
The latest edition enhances understanding with a unique learning design including
revised, integrative concept maps at the start of each chapter, end-of-chapter
features summarising ideas and themes, a mix of mini and major case studies to
illuminate concepts, and critical thinking exercises for applying skills.
MyLab Marketing can be packaged with this edition to engage students and allow
them to apply their knowledge, strengthen their understanding of key concepts and
develop critical decision making skills.

2.

Marketing Management
An Asian Perspective

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 By: Philip Kotler, Kevin Lane Keller, Swee-Hoon Ang, Chin-Tiong Tan, Siew Meng
Leong

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Published: 31st August 2017
ISBN: 9781292089584
Number Of Pages: 880

3.

Publication date 28 Sep 2018

 Publisher Pearson Education Limited

 Publication City/Country Harlow, United Kingdom

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OB:
Organizational behavior is the study of both group and individual performance and
activity within an organization. Internal and external perspectives are two theories of
how organizational behavior can be viewed by companies.

Published: 8th August 2016

Publisher: Pearson Education Australia
Stephen Robbins, Timothy Judge, Bruce Millett, Maree Boyle

Organizational behavior (OB)1 is defined as the systematic study and application of

knowledge about how individuals and groups act within the organizations where they
work. As you will see throughout this book, definitions are important. They are
important because they tell us what something is as well as what it is not. For
example, we will not be addressing childhood development in this course—that
concept is often covered in psychology—but we might draw on research about twins
raised apart to understand whether job attitudes are affected by genetics.

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Maslow’s Hierarchy of Needs

Abraham Maslow is among the most prominent psychologists of the twentieth

century. His hierarchy of needs is an image familiar to most business students and
managers. The theory is based on a simple premise: Human beings have needs that
are hierarchically ranked.Maslow, A. H. (1943). A theory of human motivation.
Psychological Review, 50, 370–396; Maslow, A. H. (1954). Motivation and
personality. New York: Harper. There are some needs that are basic to all human
beings, and in their absence nothing else matters. As we satisfy these basic needs,
we start looking to satisfy higher order needs. In other words, once a lower level
need is satisfied, it no longer serves as a motivator

The most basic of Maslow’s needs are physiological needs4. Physiological needs
refer to the need for food, water, and other biological needs. These needs are basic
because when they are lacking, the search for them may overpower all other urges.
Imagine being very hungry. At that point, all your behavior may be directed at finding
food. Once you eat, though, the search for food ceases and the promise of food no
longer serves as a motivator. Once physiological needs are satisfied, people tend to
become concerned about safety needs5. Are they free from the threat of danger,
pain, or an uncertain future? On the next level up, social needs6 refer to the need to
bond with other human beings, be loved, and form lasting attachments with others.
In fact, attachments, or lack of them, are associated with our health and well-
being.Baumeister, R. F., & Leary, M. R. (1995). The need to belong: Desire for
interpersonal attachments as a fundamental human motivation. Psychological
Bulletin, 117, 497–529. The satisfaction of social needs makes esteem needs7 more
salient. Esteem need refers to the desire to be respected by one’s peers, feel

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important, and be appreciated. Finally, at the highest level of the hierarchy, the need
for self-actualization8 refers to “becoming all you are capable of becoming.” This
need manifests itself by the desire to acquire new skills, take on new challenges, and
behave in a way that will lead to the attainment of one’s life goals.

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