BCG matrix: Understand what it is and how it relates to Inbound Marketing

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In the 1970s, the Boston Consulting Group – one of the most renowned consulting firms in the world – has created an analysis tool that even today is very useful and simple to use.

This tool is the result of a reflection of the company’s founder, Bruce Henderson, who argued that a company should have a portfolio of products with different growth rates and market share, the composition of this portfolio is a balance function among its streams cash and banks and cash generated are a function of the market share of these same portfolios.

It seems complex, right?

But it is not, and all marketing manual and strategy, however simple it may be, graphically displays this form of matrix tool that takes the company name, BCG Matrix :

BCG matrix

The x-axis, or horizontal (x) is represented by the relative market share of a given portfolio, product, or (adapting to speak of them) customer segment served / targeted.

The ordinate, or vertical (y) is represented by the potential growth rate of a given market (set of prospects and customers of a particular solution).

At the intersection of these axes are the above four rectangles formed according to the intensity of the variables is represented by figures which are shown above and described below:

  • Pineapple: customer segments with low market share and also of low growth. They are in the hold of the ship and require no investment by the company (nor bring results). So they will soon be discontinued.
  • Dairy cow: customer segments that have low growth rate but also high market share. Have received generally high prior investments of the company in its development and generate much of current cash flow by paying the rent of the building, all pay the the reception coffee and fund the most promising ideas seeking to ensure the durability and longevity company in the market.
  • In questioning: customer segments that are at a crossroads before – at least – two paths, so dilemmas are considered: whether or not emplacam and fall into the baskets of pineapples and end up extinct or fall in consumer taste (or in the mouth positive word organically and virally won irradiated or through advertising and mass advertising monetarily acquired) and increase its market share, bringing shareholder return on the investments being realized and becoming (tchanan!) stars.
  • Stars: customer segments that have high market share at the cost of large sums of money in marketing communication and / or research and development justified by the high potential growth rate of the market that are inserted. The bet is that one day, they also become dairy cows and can remunerate its shareholders and investors.

OK! And what I have to do with it?

All, for the gift of your business depends on dairy cows. They form the set of loyal and faithful customers you have today and are educated with their products and services. They do not depend as much on marketing promotional incentives to buy from you and perceive their differences in relation to its competitors. They understood their value proposition and can extract clear benefits of what you do. Above all, they are responsible for most (or at least most) of the revenue that your business generates.

But people change and with them their tastes and preferences as well. Be exercising their individual role of consumer or organizational client, tomorrow or later he may no longer be so faithful. Even if you adapt to industry changes in which it is acting, track trends in your industry and is in line with what happens in your market. One day, on a clear Portuguese, dry teat.

Hence the importance of the stars: they were already questioned one day, but presented as promising today. They represent market segments that your competitors probably had not considered (or few did) and therefore were not properly targeted, analyzed, studied and explored.

Still require a good dose of energy, time and money your to educate them, sensitizing them and making them aware of its advantages. Yet they soon understand the benefits you offer and soon become loyal customers of your company recommending you, even to colleagues, friends and family – which helps to spread your brand and contributes to longevity and health maintenance of your business.

And pineapples? The voice of the people is the voice of God, get rid of them.

And now?

The World Wide Web Tim Berners-Lee and are for the twenty-first century what Thomas Edison and electricity have been to before last and last century, changing the way people live, work, rest and eat.

Right now more and more people are researching on various subjects as the next potential supplier company working by comparing prices next SmartTV or simply envying the lives of others in the social media .

As you read this post hundreds of new users join the Internet. Many for the first time, amazed at what this informational harvest can do for them. Others extend your office access to the house, from room to room, the table into the pockets and in the way to and from work.

And it is your duty to make the part of this strange world of surfing the internet to find what you do and become guests (at first) anonymous from your digital presence.

It is their duty also invite them to learn more about how you can improve their lives and identifying them and knowing them better, start a relationship with them through valuable content.

Also, through this, they can voluntarily buy what you sell, much less by his insistence on pushing something they do not want and more by the authority who won with creativity and intelligence to them.

Do not leave for tomorrow what you can do today: educate your future customers with content over the internet .

Start now!