IBPS SO V Marketing Officer: Exam Analysis

Dear Aspirants,

Today IBPS is conducting the exam for IBPS SO V Marketing Officer . The exam is being conducted in 2 slots . Most of you have appeared for the same. Here we are providing detailed analysis of the exam.

The pattern of the exam is as follows:

Here is the detailed analysis of the exam:

 English Language

Difficulty level :Easy to Moderate

The questions are from these topics-

1. Reading Comprehension – 15 questions

2. Cloze test – 10 Question

3. Parajumbles –  5 questions

4. Sentence Improvement + error spotting +spelling error – 15 Question

5. Fill in the blanks – 5 questions

Reasoning

Difficulty level: Easy

The questions are from these topics-

1. Syllogism – 5 Question

2. Seating Arrangement –

• 5 Questions (Linear) 
• 5 Questions (Square) (inward outward)

3. Puzzle – 1 set -5 question – Floor Based

4. Input Output – 5 Question

5. Logical Reasoning – 10 question

6. Miscellaneous – 5 Question

7. Inequality- 5 Question

8. Data Sufficiency – 5 Questions

Quantitative Aptitude

Difficulty level: Moderate ( but calculative)

The questions are from these topics-

1. Number Series – 5 Questions

2. Data Interpretation – 3 set – Table, Pie, Line = 15 Questions

3. Quadratic Equation – 5 Question 

4. Data sufficiency – 5 Question

5. Miscellaneous Questions – 20 Questions

Miscellaneous Questions consist of questions from different topics such as – Profit and Loss, Time and Work; Time, Speed and distance; Simple and Compound Interest; Age, Average, Partnership etc.

Marketing Knowledge

Difficulty level: Easy to Moderate

The questions were on :

1. Basics of Marketing Management – 6-8 Question

2. Marketing Research and Forecasting Demand – 5-7 Question

3. Market Segmentation – 4-5 Question

4. Advertising, PR, Sales Promotions – 6-7 Question

5. Marketing Mix – 4-5 Question

6. Product Life Cycle – 6-7 Question

7. Sales And Distribution – 5 -6 Question

8. Miscellaneous Topics – 12-15 Question

NOTE:

Overall difficulty level of the exam is: Moderate

Good score out of 200 would be: 125-130

Expected cutoff for written exam would be: 90-95

MARKETING MANTRA FOR IBPS SO

ADVERTISING

WHAT IS ADVERTISING? Advertising is any paid form of (non-personal) communication and marketing used to convince or persuade viewers, readers or listeners about the benefits of certain products, services, a company or even ideas. Typically the aim of advertising is to influence consumption behavior with respect to commercial products or services, but the purpose of advertising may also be educational, political or ideological. Typically the advertiser has to pay for message placement, except for self-advertising. Advertising can be Business to Consumer, Business to Business. A special form is Trade Marketing. HOW DOES ADVERTISING WORK? The acronym AIDA describes the stages of an advertising process: Attention, Interest, Desire and Action. Advertisers use Positioning trying to create a favorable perception of a product or service, Brand Personality, orCorporate Reputation in the mind of the prospect. FORMS OF ADVERTISING Advertising may take many forms, which depend partly on the use of various channels: Undifferentiated (Mass) Marketing via traditional mass media such as newspapers, magazines, TV, radio, cinema, outdoor advertising. Virtually any medium can be used for advertising. Direct / One to One Marketing via traditional media (direct mail) or new media (web sites, search engines, mobile phones, social networks, email systems). Multi Channel Marketing combining two or several marketing channels which are reinforcing each other (see also:Validity Effect) DEFINITIONS OF ADVERTISING  The non-personal communication of information usually paid for & usually persuasive in nature, about products (goods & services) or ideas by identified sponsor through various media. (Arens, Wei Gold, Arens 2010) Any paid form of non-personal communication about an organization, product, service, or idea from an identified sponsor. (Blech & Blech 1998) Paid non-personal communication from an identified sponsor using mass media to persuade or influence an audience. (Wells, Burnett, & Moriaty 1998) The element of the marketing communication mix that is non personal paid for an identified sponsor, & disseminated through channels of mass communication to promote the adoption of goods, services, person or ideas. (Bearden, Ingram, & Laforge 1998) An informative or persuasive message carried by a non personal medium & paid for by an identified sponsor whose organization or product is identified in some way. (Zikmund & D'amico 1999) Impersonal; one way communication about a product or organization that is paid by a marketer. (Lamb, Hair & Mc.Daniel 2000) Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. (Kotler et al., 2006) DEFINING AN ADVERTISING STRATEGY A key tool used by marketers to define advertising strategies for products is McCarthy's Marketing Mix (1960s), also called the 4 P's: Product, Price, Place and Promotion. Later, Booms and Bitner defined the Extended version of the Marketing Mix, also called the 7 P's (add: People, Process and Physical Evidence) which is preferable to design campaigns for intangible products and services. The effectiveness of advertising can be measured by the advertising elasticity of demand. This measures the percentage increase in demand divided by the percentage increase in advertising spending (a number of other factors are also involved to correct for external influences). FROM MASS TO SEGMENTED TO INDIVIDUAL MARKETING In the past, most advertisements were aimed at the general public. This is changing due to following causes: Target Marketing: the process of communicating, marketing and selling products or services to groups of consumers with similar characteristics (identified via market segmentation) Niche Marketing: advertisers increasingly want to reach small but profitable market segments with increasingly custom-made products or services. Internet Technology: increased ability and efficiency to distinguish, target and fulfill individual customer profiles and needs. IMPORTANCE OF ADVERTISING For the economy: The global spending on advertising is immense which makes it a major economic activity by itself. For the media: Advertising can be (an important component of) a business model, as is valid for TV, radio, newspapers, magazines as well as search engines and web sites. Most media outlets would not be in business without revenue generated through the sale of advertising. For advertisers: For many advertisers advertising is crucial to gain interest for their products and services. For consumers: Advertising can have an informational or even educational value for the consumer. ADVERTISING AGENCIES Designing and managing large advertising campaigns is complex and time-consuming. Multiple specialized skills are needed. While large companies are able to manage certain advertising activities themselves, a lot of advertising activities are also traditionally outsourced to specialized advertising agencies. Typical roles and responsibilities of professionals of advertising agencies include: Account Manager. Locates, acquires and negotiates with (potential) clients. Develops advertising campaigns with the client and is the interface between the advertising agency and the advertiser. Creative Manager. Generates ideas, designs concepts and creates the final advertisement. Market Researcher. Assesses a client’s market situation, researches and analyses customers and competitors. Tests campaigns with Focus Groups. Technical Specialist. Graphic design, film and audio production, copywriting, web programming. Media Planner. Responsible for placing advertisements in appropriate and most effective advertising media

Customer Relationship Management

crm WHAT IS ANALYTICAL CRM? DESCRIPTION Analytical CRM is the part of Customer Relationship Management that aims at storing, analyzing and applying the knowledge about customers and about ways to approach customers, typically using databases, statistical tools, data mining, machine learning, Business Intelligence and reporting methodologies. Customer knowledge consists out of: Basic personal data such as: customer name, company name, business unit, business department, address, email, phone, fax, gender, nationality, etc More sophisticated client knowledge such as: Client value (annual revenue, profitability) Transactions (product description, revenue, profit, payment method, payment behavior) Internet communication (IP-address, entry page, click stream, visit length) Telephone communication (call center report data, sales calls) Other communications (mailings, response) Customer satisfaction (with product, service, company) This client information can be captured from the processes (sales, services, finance, marketing) and channels (Multi Channel Marketing) of the organization. Certain data can also be acquired from external sources, such as market research data or address databases. It is often advisable to store all client data centrally for the organization to avoid 'multiple versions of the truth'. Client data should be actual, complete, correct, unique (each client should be in the database only 1 time) and accessible for those who need it when they need it. This is true a fortiori for companies with a strategicCustomer Relationship Management philosophy. USAGE OF ANALYTICAL CRM. APPLICATIONS Optimize marketing effectiveness. Customer acquisition, cross-selling, up-selling, retention, etc. Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development). Compare: Quality Function Deployment. Management decisions, e.g. financial forecasting and customer profitability analysis. Prediction of the probability of customer defection (churn). STEPS IN ANALYTICAL CRM. PROCESS After the client data is collected and stored, the actual analysis can take place. The analysis process is roughly made of the following steps: Problem formulation. What do we want to know. Is answering the question relevant and possible (technically, financially and organizationally). Typical a CRM analysis question is about: Segmentation of clients Acquisition analysis (what is the quality of various lists or databases) Relation analysis (expected retention, opportunities for cross-selling, deep-selling, up-selling) Channel or approach analysis (which channel or approach gives the best results) Preparation (random sample survey, relevant variables, cases, spread in scores, prepare definitive dataset) Definitive analysis, using: Statistical techniques (Regression Analysis,  Dynamic Regression, Exploratory Factor Analysis, Exponential Smoothing, ARIMA) Datamining, typically aimed at discovering non-obvious or non-linear patterns in the data. Machine learning (Artificial Intelligence) techniques, such as: neural networks, genetic algorithms, association rules and case-based reasoning. Visualizing the results in such a way that it is understandable for the users. STRENGTHS OF ANALYTICAL CRM. BENEFITS Can help to find and explore useful knowledge in large customer databases. Classify customers, predict customer behavior, select market approach or channel. LIMITATIONS OF ANALYTICAL CRM. DISADVANTAGES Certain Analytical CRM techniques can be complex to understand. Still in early stage of usage.

Break-even Point

The Break-even Point is, in general, the point at which the gains equal the losses. A break-even point defines when an investment will generate a positive return. The point where sales or revenues equal expenses. Or also the point where total costs equal total revenues. There is no profit made or loss incurred at the break-even point. This is important for anyone that manages a business, since the break-even point is the lower limit of profit when prices are set and margins are determined.

Achieving Break-even today does not return the losses occurred in the past. Also it does not build up a reserve for future losses. And finally it does not provide a return on your investment (the reward for exposure to risk).

The Break-even method can be applied to a product, an investment, or the entire company's operations and is also used in the options world. In options, the Break-even Point is the market price that a stock must reach for option buyers to avoid a loss if they exercise. For a Call, it is the strike price plus the premium paid. For a Put, it is the strike price minus the premium paid.

THE RELATIONSHIP BETWEEN FIXED COSTS, VARIABLE COSTS AND RETURNS

Break-even analysis is a useful tool to study the relationship between fixed costs, variable costs and returns. The Break-even Point defines when an investment will generate a positive return. It can be viewed graphically or with simple mathematics. Break-even analysis calculates the volume of production at a given price necessary to cover all costs. Break-even price analysis calculates the price necessary at a given level of production to cover all costs. To explain how break-even analysis works, it is necessary to define the cost items.

Fixed costs, which are incurred after the decision to enter into a business activity is made, are not directly related to the level of production. Fixed costs include, but are not limited to, depreciation on equipment, interest costs, taxes and general overhead expenses. Total fixed costs are the sum of the fixed costs.

Variable costs change in direct relation to volume of output. They may include cost of goods sold or production expenses, such as labor and electricity costs, feed, fuel, veterinary, irrigation and other expenses directly related to the production of a commodity or investment in a capital asset. Total variable costs (TVC) are the sum of the variable costs for the specified level of production or output. Average variable costs are the variable costs per unit of output or of TVC divided by units of output.

The Break-even Point analysis must not be mistaken for the Payback Period, the time it takes to recover an investment.

In Value Based Management terms, a break-even point should be defined as the Operating Profit margin level at which the business / investment is earning exactly the minimum acceptable Rate of Return, that is, its total cost of capital.

BREAK-EVEN POINT CALCULATION

Calculation of the BEP can be done using the following formula:

BEP = TFC / (SUP - VCUP)

where:

• BEP   = break-even point (units of production)
• TFC    = total fixed costs,
• VCUP = variable costs per unit of production,
• SUP   = selling price per unit of production.

BENEFITS OF BREAK-EVEN ANALYSIS

The main advantage of break-even analysis is that it explains the relationship between cost, production volume and returns. It can be extended to show how changes in fixed cost-variable cost relationships, in commodity prices, or in revenues, will affect profit levels and break-even points. Break-even analysis is most useful when used with partial budgeting or capital budgeting techniques. The major benefit to using break-even analysis is that it indicates the lowest amount of business activity necessary to prevent losses.

LIMITATIONS OF BREAK-EVEN ANALYSIS

• It is best suited to the analysis of one product at a time;
• It may be difficult to classify a cost as all variable or all fixed; and
• There may be a tendency to continue to use a break-even analysis after the cost and income functions have changed.

Product Life Cycle

The Product Life Cycle model can help to analyze maturity stages of products and industries. The term was used for the first time by Theodore Levitt in 1965 in an Harvard Business Review article: "Exploit the Product Life Cycle" (Vol 43, November-December 1965, pp 81-94). Any company is constantly seeking ways to grow future cash flows by maximizing revenue from the sale of products and services. Cash Flow allows a company to maintain its viability, invest in new product development and improve its workforce. All this in an effort to acquire additional market share and become a leader in its respective industry. A constant and sustainable cash flow (revenue) stream from product sales is key to any long-term investment, and the best way to attain a stable revenue stream is to have one or more Cash Cows. Cash Cows are strong products that have achieved a large market share in mature markets. Also, the modern Product Life Cycle is becoming shorter and shorter. Many products in mature industries are revitalized by product differentiation and market segmentation. Organizations increasingly reassess product life cycle costs and revenues, because the time available to sell a product and recover the investment shrinks. Although the product life cycle shrinks, the operating life of many products is lengthening. For example, the operating life of some durable goods, such as automobiles and appliances, has increased substantially. As a result, the companies that produce these products must take their market life and service life into account when they are planning. Increasingly, companies are attempting to optimize revenue and profits over the entire life cycle. They do this through the consideration of product warranties, spare parts, and the ability to upgrade existing products. It is clear that the Product Life Cycle concept has significant impact upon business strategy and corporate performance. The Product Life Cycle method identifies the distinct stages affecting sales of a product. From the product's inception until its retirement. THE STAGES IN THE PRODUCT LIFE CYCLE Introduction stage. The product is introduced in the market through a focused and intense marketing effort designed to establish a clear identity and promote maximum awareness. Many trial or impulse purchases will occur at this stage. Growth stage. Can be recognized by increasing sales and the emergence of competitors. At the vendor's side, the Growth stage is also characterized by sustained marketing activities. Some customers make repeat purchases. Maturity stage. This phase can be recognized when competitors beginning to leave the market. Also, sales velocity is dramatically reduced, and sales volume reaches a steady level. At this point in time, typically loyal customers purchase the product. Decline stage. The lingering effects of competition, unfavorable economic conditions, new trends, etc, often explain the decline in sales. Several variations of the Industry Life Cycle model have been developed to handle the development of the product, market, and/ or industry. Although the models are similar, they differ as to the number and names of the stages. Here is a list of some major models: VARIATIONS OF THE LIFE CYCLE MODEL 1973: Fox: precommercialization - introduction - growth - maturity - decline. 1974: Wasson: market development - rapid growth - competitive turbulence - saturation/maturity - decline 1984: Anderson & Zeithaml: introduction - growth - maturity - decline 1998: Hill and Jones: embryonic - growth - shakeout - maturity - decline

4P'S

WHAT IS THE MARKETING MIX? DESCRIPTION

The Marketing Mix model (also known as the 4 P's) can be used by marketers as a tool to assist in defining the marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target market by blending 4 (or 5, or 7) variables in an optimal way. It is important to understand that the Marketing Mix principles are controllable variables. The Marketing Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other dynamics of the marketing environment.

Product	Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today's highly competitive markets. Plus there are many laws giving customers the right to send back products that he perceives as bad. Therefore the question on product has become: does the organization create what its intended customers want? Define the characteristics of your product or service that meets the needs of your customers.	Functionality; Quality; Appearance; Packaging; Brand;Service; Support; Warranty.
Price	How much are the intended customers willing to pay? Here we decide on a pricing strategy - do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach.	List Price; Discounts; Financing; Leasing Options; Allowances.
Place	Available at the right place, at the right time, in the right quantities? Some of the recent major changes in business have come about by changing Place. Think of the Internet and mobile telephones.	Locations; Logistics; Channel members; Channel Motivation; Market Coverage; Service Levels; Internet; Mobile.
Promotion	(How) are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory - advertising, selling, sales promotions, Direct Marketing, Public Relations, etc. While the other three P's have lost much of their meanings in today's markets, Promotion has become the most important P to focus on.	Advertising; Public Relations; Message; Direct Sales; Sales; Media; Budget.

The function of the Marketing Mix is to help develop a package (mix) that will not only satisfy the needs of the customers within the target markets, but simultaneously to maximize the performance of the organization. There have been many attempts to increase the number of P's from 4 to 5P's in the Marketing Mix model. The most frequently mentioned one being People or Personnel. Booms and Bitner have suggested a 7-Ps approach for services-oriented companies.

The 7-Ps or Extended Marketing Mix of Booms and Bitner is a Marketing Strategy tool that expands the number of controllable variables from the four in the original Marketing Mix Model to seven.

USAGE OF THE EXTENDED MARKETING MIX

The traditional Marketing Mix model was primarily directed and useful for tangible products. The 7-Ps model is more useful for services industries and arguably also for knowledge-intensive environments.

3 EXTRA P'S

Booms and Bitner's have added the following 3 additional Ps to the original Marketing Mix:

5. People: All people that are directly or indirectly involved in the consumption of a service are an important part of the Extended Marketing Mix. Knowledge workers, employees, management and consumers often add significant value to the total product or service offering.
6. Process: Procedure, mechanisms and flow of activities by which services are consumed (customer management processes) are an essential element of the marketing strategy.
7. Physical Evidence: The ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.

The first two more Ps are explicit (People, Process) and the third one (Physical Evidence) is an implicit factor.

Booms and Bitner also suggest that Place in a service-oriented company includes the accessibility of the service, and that Promotion in a service-oriented company includes the input of front-line service personnel.

BUSINESS INCUBATOR

DEFINITION BUSINESS INCUBATOR. DESCRIPTION.   A Business Incubator is an innovative, supporting organization designed to accelerate the growth and success of typically Start-up Companies or entrepreneurial firms at the beginning of their existence. They can be seen as a special form of Outsourcing, supporting a Virtual Business. They may be for-profit (private incubators) or non-profit (public incubators) and may specialize in a particular industry or not. Normally a client company resides in the incubator facility. But most incubators also serve virtual clients such as home-based businesses or early-stage companies that have their own premises, but still want to benefit from certain incubator services. In most countries, incubation programs are funded or supported (infrastructure) by local, regional or national governments as part of their economic development strategy. COMMON BUSINESS INCUBATOR SERVICES Incubators can offer a broad spectrum of services to entrepreneurs with a feasible idea, including: Office space and facilities. Assistance in making a business plan. Legal services (regulatory compliance, Intellectual Property, etc.) Technical and IT support, Internet access. Advisory board, management support services, mentoring, coaching. Marketing support services. Financial assistance. Accounting. Administrative services. Access to angel investors and venture capital. Access to various bank loans, loan funds, etc.. Networking activities with various organizations and people. Strategic partners. Other incubators. Universities and research institutions. Consultancy firms. Seed capital, venture capital funds, business angels, banks. Government agencies. USING BUSINESS INCUBATION AS A STRATEGY FOR EXISTING FIRMS In order to stay competitive, existing organizations also need to respond to the challenges and changes of “the new economy”, the “network economy” and the “knowledge economy” so as to take advantage of new opportunities arising from them. Nevertheless, there are many companies that haven’t restructured their strategies and operations in reaction to these dynamic economic changes yet. According to Eshun (2009), companies need to radically change their organizational culture so as to be able to discover and take advantage of new opportunities that arise from the dynamic economic transformations: a so-called “business-incubation” strategy must be adopted. What exactly does such a strategy mean? A business incubation strategy refers to the processes, projects, actions and events that diagnose and analyzes new and emerging opportunities with the goal of restructuring and improving organizations existing product/services, technologies and operations and creating new ones. Eshun mentions three reasons why such a strategy is critical: The emergence of business incubators – organizations that aim to spur the growth and the success of starting entrepreneurial companies (start-ups) through business support resources and services, such as coaching and the provision of shared offices- have been indicative of the revolutionary changes in the economic structure since the 1970s. A business incubation strategy requires multidimensional resources, skills and technologies that help creating and maintaining useful networks both internally and externally. These networks are important to produce and share new ideas, knowledge and information, which are critical elements in the changed economic environment. Business incubators are organizational forms that have large potential. They can be adapted to different organizational conditions and are able to bring about useful interventions for governments for example (business incubators often require external, public support; therefore they play an important role in both fostering local economies as well as in channeling government resources). Furthermore, they can be both stand-alone facilities as well as being related to certain programs or researches. With these advantages it is not surprising that business incubators have been exploited and leveraged by multiple entities such as financial institutions, research institutions and governments.

BCG MATRIX

The BCG Matrix method is the most well-known portfolio management tool. It is based on product life cycle theory. It was developed in the early 70s by the Boston Consulting Group. The BCG Matrix can be used to determine what priorities should be given in the product portfolio of a business unit. To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. The Boston Consulting Group Matrix has 2 dimensions: market share and market growth. The basic idea behind it is: if a product has a bigger market share, or if the product's market grows faster, it is better for the company.

THE FOUR SEGMENTS OF THE BCG MATRIX

Placing products in the BCG matrix provides 4 categories in a portfolio of a company:

• Stars (high growth, high market share)
  • Stars are using large amounts of cash. Stars are leaders in the business. Therefore they should also generate large amounts of cash.
  • Stars are frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold your market share in Stars, because the rewards will be Cash Cows if market share is kept.
• Cash Cows (low growth, high market share)
  • Profits and cash generation should be high. Because of the low growth, investments which are needed should be low.
  • Cash Cows are often the stars of yesterday and they are the foundation of a company.
• Dogs (low growth, low market share)
  • Avoid and minimize the number of Dogs in a company.
  • Watch out for expensive ‘rescue plans’.
  • Dogs must deliver cash, otherwise they must be liquidated.
• Question Marks (high growth, low market share)
  • Question Marks have the worst cash characteristics of all, because they have high cash demands and generate low returns, because of their low market share.
  • If the market share remains unchanged, Question Marks will simply absorb great amounts of cash.
  • Either invest heavily, or sell off, or invest nothing and generate any cash that you can.

THE BCG MATRIX AND ONE SIZE FITS ALL STRATEGIES

The BCG Matrix method can help to understand a frequently made strategy mistake: having a one size fits all strategy approach, such as a generic growth target (9 percent per year) or a generic return on capital of say 9,5% for an entire corporation.

In such a scenario:

• Cash Cows Business Units will reach their profit target easily. Their management have an easy job. The executives are often praised anyhow. Even worse, they are often allowed to reinvest substantial cash amounts in their mature businesses.
• Dogs Business Units are fighting an impossible battle and, even worse, now and then investments are made. These are hopeless attempts to "turn the business around".
• As a result all Question Marks and Stars receive only mediocre investment funds. In this way they can never become Cash Cows. These inadequate invested sums of money are a waste of money. Either these SBUs should receive enough investment funds to enable them to achieve a real market dominance and become Cash Cows (or Stars), or otherwise companies are advised to disinvest. They can then try to get any possible cash from the Question Marks that were not selected.

OTHER USES AND BENEFITS OF THE BCG MATRIX

• If a company is able to use the experience curve to its advantage, it should be able to manufacture and sell new products at a price that is low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable.
• BCG model is helpful for managers to evaluate balance in the firm’s current portfolio of Stars, Cash Cows, Question Marks and Dogs.
• BCG method is applicable to large companies that seek volume and experience effects.
• The model is simple and easy to understand.
• It provides a base for management to decide and prepare for future actions.

LIMITATIONS OF THE BCG MATRIX

Some limitations of the Boston Consulting Group Matrix include:

• It neglects the effects of synergy between business units.
• High market share is not the only success factor.
• Market growth is not the only indicator for attractiveness of a market.
• Sometimes Dogs can earn even more cash as Cash Cows.
• The problems of getting data on the market share and market growth.
• There is no clear definition of what constitutes a "market".
• A high market share does not necessarily lead to profitability all the time.
• The model uses only two dimensions – market share and growth rate. This may tempt management to emphasize a particular product, or to divest prematurely.
• A business with a low market share can be profitable too.
• The model neglects small competitors that have fast growing market shares.
•