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Product development and the Boston matrix
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Businesses need a flow of new products and a balanced range. Packaging and the Boston matrix help them manage this.
New products, goods and services
New product development usually goes: idea, research, design, test marketing, launch.
Goods are physical items you can touch. Services are actions you cannot touch, such as a haircut. Services cannot be stored and are often produced and used at the same time.
Packaging protects the product, gives information (ingredients, instructions) and attracts customers through its design.
Goods are physical items you can touch. Services are actions you cannot touch, such as a haircut. Services cannot be stored and are often produced and used at the same time.
Packaging protects the product, gives information (ingredients, instructions) and attracts customers through its design.
The Boston matrix
The Boston matrix sorts a business's products (its product portfolio) by market share and market growth.
Using the matrix
Cash from cash cows can fund question marks and stars.
A balanced portfolio has products in different positions, so the business is not relying on one product.
Limitation: it is a snapshot and does not show profit, and a 'dog' can still be useful.
A balanced portfolio has products in different positions, so the business is not relying on one product.
Limitation: it is a snapshot and does not show profit, and a 'dog' can still be useful.
A product has a large share of a market that is no longer growing. Where is it in the Boston matrix?
- High market share.
- Low market growth.
Answer: Cash cow
New products go from idea to launch. Goods are tangible; services are not. Packaging protects, informs and attracts. Boston matrix: stars, cash cows, question marks and dogs, by market share and growth.
The interactive lesson includes the diagrams for this topic.
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