An example of this product would be a regular Colgate toothpaste.īut the question is, how do we exactly find out what phase our product is in, and how do we classify what we sell? Furthermore, we also ask, where does each of our products fit into our product mix? Should we promote one product more than the other one? The BCG matrix can help with this. The is the milking cow that brings in the constant flow of cash. This product has only limited budget for marketing. Characteristics of this product do not change much, customers know what they are getting, and the price does not change much either. An example of this product would be an iPod.Ī low-growth product is for example an established product known by the market. It takes some effort and resources to market it, to build distribution channels, and to build sales infrastructure, but it is a product that is expected to bring the gold in the future.

Having a balanced product portfolio includes both high-growth products as well as low-growth products.Ī high-growth product is for example a new one that we are trying to get to some market. In general, a company should maintain a balanced portfolio of products. When should I use the BCG matrix model?Įach product has its product life cycle, and each stage in product's life-cycle represents a different profile of risk and return. The BCG model is based on classification of products (and implicitly also company business units) into four categories based on combinations of market growth and market share relative to the largest competitor. The BCG matrix model is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's.

What is the bcg matrix