CI - Session 2 Flashcards
(26 cards)
The BCG (growth/share) matrix (product)
matrix used to help corporations to analyze their product lines
Stars: Product groups which have a high market share in a growing market
Question marks (or problem child): Product groups in a growing market, which do not yet have a high market share
Cash cows: Product groups that have a high market share in a mature market
Dogs: Product groups that have a low market share in a static or declining market
Sales
how many products are sold and via which channel
Usage
How products at different price levels are used, and how often
adoption rate
Adoption rate is the extent to which new products are adopted
Product development process
Market analysis
Idea generation
concept screening
product development
product launch strategy
Cannibalization rate
Cannibalization rate is the rate at which new product sales are stealing sales from existing lines.
Marketing Cost Per Unit
marketing expense divided by sales volume
usually costs are highest at introduction. As sales increase overtime, costs decrease
Sales price variation
sales price variation measures the difference between the actual price charged and the recommended price for each unit.
Profit Impact
profit impact measures the cash contribution per unit at different projected levels of sale, taking into account fixed + variable costs, marketing costs, and pricing.
Price/Brand premium
Price/Brand premium is the additional amount customers pay for branded products over a weaker brand.
price inelastic
If demand for product changes very little with price change that product is described as ‘price inelastic.
price elastic
If demand changes considerably with price change its price elastic
Market share
A measure of an organization’s sales as a % of the total sales volume in their industry, sector, market or product area
Can be stated in units or as a monetary value
Relative Market share
A metric for comparing markets share of the organization with its closest competitor to gauge relative performance.
(Our business/largest competitor) x 100 = %
Market growth
Market growth is measured by comparing sales against the previous period (y-o-y / p-o-p).
Market penetration
Purchases of a product category as a percentage of a total population
Market Penetration (%) = Customers who have purchased a product or category (#) / Total Population (#)”
Ansoff Matrix (business growth)
The Ansoff Matrix is a strategic planning tool used to help businesses determine their product and market growth strategy.
Market Penetration: Focuses on increasing sales of existing products to the existing market
Market Development: Involves entering new markets with existing products.
Product Development: Entails developing new products to serve the existing market
Diversification: This is the most risky strategy, involving the introduction of new products into new markets.
Share of voice
Compares the media spending by an organisation with the total expenditure for the product, service or category.
Share of voice = ad spend by organization / total ad spend
Leading metrics
Leading metrics are predictive and provide early indicators of future performance
(Ad impressions/ Mqls/Downloads)
Lagging metrics
Lagging metrics are outcome-focused and reflect the success of past actions.
(Sales/ROI/CAC/Profit Margin)
Social media + Website metrics
Social media metrics = Awareness, engagement, conversion, CTR
Website metrics = Traffic, engagement, SEO
Website analytics
Traffic, Engagement, conversions, SEO
Porter’s Five Forces (Competitive environment)
Porter’s five forces are used to identify and analyze an industry’s competitive forces.
- Competitive Rivalry
- Supplier Power
- Buyer Power
- Threat of substitution
- Threat of New Entrants
Types of competitors
Direct competitors are firms which offer a similar product to the same market.
Indirect competitors are firms that offer different products that meet same need.
Potential competitors do not currently compete but will be a threat in the future.
Incipient competitors are the competitors who do not exist currently, but may emerge as a result of transformation in the industry”
