- Explain why it may be less of a risk for PLP to carry on with its present customers as well as forming a new “niche market” for the new product and using a different brand name.
I think that the PLP should keep their present customers because it will be less of a risk if they solely concentrate on the “niche market” as it could be a complete and it would ruin them. So if they keep there current customers as well as introducing there “market niche” it will be a lot less low risk. Also if they totally change the name of there new “market niche” they will attract new customers as well as keeping their current customers.
- What position of the matrix do you think PLP Ltd is, based on the information given in a case study?
I think that PLP Ltd is branded as a “dog” in the Boston Matrix. This is because they are about ready for the chop, which is why they are going into a “market niche”.
- If PLP Ltd were to introduce a new product and aim this at a new market segment, which sector would the new product be placed? Give reasons for your choice.
If PLP Ltd was to introduce a new product into a new market segment I believe it should be placed into the ‘Star’ sector. This is because as it is a new product they will want the product to be quite successful, with a high market growth rate, though compromising its market share. ‘Star’ products have a high potential for profit, especially if they have a good USP. PLP will want this new product to grow slowly from a ‘Star’ product into something such as a cash cow, to keep a good cash flow coming in.
- Name the sector of the Boston Matrix that PLP Ltd should aim to move, following the market research that has been carried out? Explain why the company needs to aim for this sector.
I think that PLP Ltd should aim to put their product in the cash cow sector of the Boston Matrix. I think they should aim to put into this sector because if a product becomes a cash cow it usually has a high growth potential, which this company is looking for as their current product lines are struggling at the moment. Also cash cows tend to develop their specific characteristics and with time establish their personality and set them self apart from the rest of the market. Finally cash cows generate a vast amount of money, often far in excess of the investment which is what this company needs.
- Discuss why portfolio planning such as The Boston Matrix and the product life cycle is vital to marketing management?
Both the Boston Matrix and the product life cycle are essential for marketing management. The Boston matrix is useful because it indicates how well the product is doing. If it is star or cash cow it is doing well in the market especially a cash cow. Secondly a product life cycle can indicate when a new product is to be introduced into the market and when the old product has died out.