This is exactly where one of the most interesting marketing tools comes into play, the BCG Matrix.
The different products, in fact:
They may have been developed to meet different targets.
They can alternate over time to respond to the same need of the same customer segment.
Let's leave aside the first case for now, the one in which the company addresses different markets, and therefore the marketing strategy for each product will derive from the objectives it has set for that specific market.
Let's focus instead on the second case: products that insist on the same market, for example because they represent alternative methods of satisfying the same need (think of the variety of offers that can be found, for example, in the category "frozen first courses") or because they represent in some way an evolution of the other, even if there are good reasons for them all to remain within the company's catalogue.
How to balance investments between different products? Where is it worth insisting, and where is it better to lighten the expenditure? And is the current portfolio sufficient, or should it be integrated with new products?
The Boston Consulting Group Matrix (which some call, for short, the Boston Matrix) helps you organize your product portfolio and answer these questions.
What is the Boston Matrix?
The BCG Matrix was developed in the 1970s by the famous consulting agency whose name it bears and has since then rightfully become one of the most cited marketing tools.
Essentially, it is a Cartesian plane on which it is represented how much a certain market is growing and how relevant our product is within it. Its construction is therefore conceptually simple, but the developments are extremely interesting: it allows us to identify an evolution of the product that marries perfectly with the graph of the life cycle of the product itself.
In this way it becomes easier to understand if a product is still in a growth phase, if it has reached maturity or if it is in decline. Based on this awareness, the company will decide what amount of communication expenses it is appropriate to dedicate to it.
What is an ASA, or SBU
The first step in designing a good Boston Matrix is to define which Strategic Business Area (or Strategic Business Unit, in English) we are dealing with.
The ASA is the area of activity in which the company has decided to operate. Depending on the specific case, it can be represented by a broad market or by a narrow segment of it; metaphorically speaking, it is the playing field in which the company is moving, the one in which it actually competes or wants to compete.
For each ASA we need to know the total value of the turnover and how it changes over time. For each of our products within that same ASA, instead, we need to know the share held by us and that held, instead, by the main player (i.e. the competitor's product that holds the largest slice of the market).
