Feb 9, 2011

Where your brand stands: BCG Matrix

BCG matrix is a tool for companies to determine their product portfolio and strategic business units for developing best possible business strategy. BCG matrix was developed by “Boston consulting group” to facilitate the companies and corporation for managing their product and business portfolio. The names of four cells in BCG Matrix are as Cash Cows, Stars, Question Marks, and Dogs. The products or business with high relative market share and low industry growth rate falls into cash cows cell. These business entities generate more cash inflow with less requirements of investment. The Cash cows have high market share but industry growth is slow as compared to stars. Stars are the business entities with high market share and industry growth. The cash inflows are high but on the other hand it also requires heavy investment to meet the expenses of marketing, distribution, R&D and other business operations.
As named suggest Question marks are the business entities with high growth rate and low market share. It can fall either into Stars and Dogs, company has to make decision to further invest on Question marks or eliminate by selling off to other companies. Dogs are the business entities with low market share and growth rate. No company wants dogs in their business or product portfolio because they only eat meat in the form of cash and having minimal cash inflows. The best thing company can do is to liquidate the dogs to minimize the risk. One strategy to boost your question marks into stars is promoting a brand through loyalty cards. The loyalty members are benefitted in many senses. They get better pricing on items and upgraded features. They also get separate billing counter to avoid the rush of billing. This truly makes customers special to the particular business group. Today, almost all types of business houses have started loyalty programs. One can find such programs in hotels, provisionary shops, garment store, gaming zone, food plaza, spa, gym and almost everywhere.
The benefit availed under the loyalty card depend on the points collected. The more points you collect, the greater benefits you can avail. The schemes of loyalty cards vary greatly. Some of the cards provide redemption scheme. It means you can use the points for money value in buying certain items from the store. Other is discount providing card. Some of the cards provide certain discount on each purchase after collecting certain determined points. Some cards give priority to members who are under the loyalty program of the respective company. Such loyalty cards are offered in health clubs, libraries, food departmental store, country club, hotels, spa, etc. The member customers are provided service quickly. They do not need to wait to avail the service. Some of the companies offer special deals to their member customers. Items are available on additional discount. They are informed about the new collection and promotional items via emails and messages. They are also informed at the schemes available in the company.
Loyalty programs are mutually beneficial to the business groups and customers. So, become members of your favorite brand and avail loyalty card to enjoy freedom, discounts and other benefits provided. The card contains information in magnetic codes behind the black stripe of the card. Card making companies print and design membership and loyalty cards for companies.

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