The 7 Ps of Marketing Mix

MARKETING THEORIES –THE MARKETING MIX – FROM 4 P’S TO 7 P’S

Marketing is a continually evolving discipline and as such can be one that companies find themselves left very much behind the competition if they stand still for too long. One example of this evolution has been the fundamental changes to the basic Marketing mix. Where once there were 4 P’s to explain the mix, nowadays it is more commonly accepted that a more developed 7 P’s adds a much needed additional layer of depth to the Marketing Mix with some theorists going even going further.

Before We move to 7 P we must first try to understand what is original 4 P given by management Professional for marketing mix .

THE MARKETING MIX       

Simply Marketing Mix is a way used by businesses , corporate , managers and Marketers to determine a proper product or brands offering. The 4 P’s have been associated with the Marketing Mix since their creation by E. Jerome McCarthy in 1960.

The Marketing Mix 4 P’s is illustrated as belows:

·         Product - The Product should fit the task consumers want it for, it should work and it should be what the consumers are expecting to get.

·         Place – The product should be available from where your target consumer finds it easiest to shop. This may be High Street, Mail Order or the more current option via e-commerce or an online shop.

·         Price – The Product should always be seen as representing good value for money. This does not necessarily mean it should be the cheapest available; one of the main tenets of the marketing concept is that customers are usually happy to pay a little more for something that works really well for them.

·         Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent times, Social Media are all key communication tools for an organization. These tools should be used to put across the organization’s message to the correct audiences  in the manner they would most like to hear, whether it be informative or appealing to their emotions.

In the late 70’s it was widely discussed by Marketers/ Management Gurus  that the Marketing Mix with changing scenario and evolving technological environment , changing customer preference and competition  , it requires more thing to be considered while making marketing and product Strategy . This led to the creation of the Extended Marketing Mix in 1981 by Booms & Bitner who had added 3 new elements to the 4 P’s Principle. This extended Marketing Mix includes  products that are services and not only just physical things.

The extended 7 P’s includes following three important element :

·         People – All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.

Processes –The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for.

·         Physical Evidence – Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDF’s) they are still receiving a “physical product” by this definition.

Though in place since the 1980’s the 7 P’s are still widely taught due to their fundamental logic being sound in the marketing environment and marketers abilities to adapt the Marketing Mix to include changes in communications such as social media, updates in the places which you can sell a product/service or customers expectations in a constantly changing commercial environment.

Is there an 8th P?

In some spheres of thinking, there are 8 P’s in the Marketing Mix. The final P is Productivity and Quality. This came from the old Services Marketing Mix and is folded in to the Extended Marketing Mix by some marketers so what does it mean?

The 8th P of the Marketing Mix:

·         Productivity & Quality - This P asks “is what you’re offering your customer a good deal?” This is less about you as a business improving your own productivity for cost management, and more about how your company passes this onto its customers.

Even after 31 years (or 54 in the case of the original P’s) the Marketing Mix is still very much applicable to a marketer’s day to day work. A good marketer will learn to adapt the theory to fit with not only modern times but their individual business model.

Marketing and Marketing management Philosphy

1                                                                                                      Marketing

Marketing is an organizational function and a set of process for creating , communicating and delivering value to customer and for  managing customer relationship in ways that benefits the organization and its stake holder . Definition given by American Marketing Association

Marketing Management Philosophies:

There are four type of marketing management philosophy which influences entire marketing process of an organization. They are mentioned as below :

a)      Production Orientation

b)      Sales  Orientation

c)       Market Orientation

d)      Societal Marketing Orientation

a)      Production Orientation :-

 A Production Orientation is a philosophy that focuses on the internal capability of the firm rather than need and desire of market place. In this philosophy , an organization focus on available resource with them and product or service which is convenient to make or deliver with available resource rather then what is current need , desire and demand of market .

A Production Orientation falls short because it does not consider whether the goods and service that the firm produces most efficiently also meets the needs of the  market philosophy .

A product orientation  firm can survive and prosper when competition is weak or demand exceeds supply .But in order for firm to succeed in competitive market , it must have clear understanding of needs and demand of market place and then produce according to required condition , rather then putting it focus on what company management thinks should be produced .

b)      Sales Orientation

A Sales Orientation is based on the ideas that people will buy more goods and service if aggressive sales techniques are used and that high sales result in high profit .

Main problem with sales oriented firm is lack of understanding of the needs and wants of the marketplace. Sales-oriented companies often find that, despite the quality of their sales force , they cannot convince people to buy goods or services that are neither wanted nor needed.

c)       Market Orientation

Market Orientation Philosophy states that the social and economic justification of an organization’s existence  is the satisfaction of customer wants and needs while meeting organization objective .

It is based on an understanding that a sales does not depend on an aggressive sales force , but rather on a customer’s decision to purchase a product .

The marketing concept includes the following :

·         Focusing on customer wants and needs so that the organization can distinguish its products from competitor offering .

·         Integrating all the organization’s activities , including production , to satisfy these wants .

·         Achieving long term goals for the  organization by satisfying customer wants and needs legally and responsibly .

D) Societal Marketing Orientation

Societal Marketing Orientation Philosophy states that an organization exist not only to satisfy customer wants and needs and to meet organizational objective but also to preserve or enhance individuals’ and society’s long term best interests .

Management Style

There are several different types of management styles when it comes to managing in the workplace and choosing the right type of style to lead with could have a big impact in terms of how your staff produces for you. But knowing the four different leadership styles in management does not mean that you can simply pick one and then that is going to work because you are then in essence trying to fit a square peg into a round hole. In most cases, the traits of the staff that you are managing will help to define the management styles you will use, something blending a combination of the different categories.
Here is a look at the four different types of management styles and the situations when each of them may need to be use.

Autocratic Management Style

An autocratic manager makes decisions without the consultation of others, instead serving as a dictator type in communicating orders because they like to be in control of situations. This style of management leads to work getting done on time because there are less people involved in the decision making process. The problem with this type of management style is that the staff are going to eventually lost motivation working in an environment where they have no say and employee turnover is likely to run high as they move on to other opportunities where they can have an impact.
For situations or events where an on the spot decision needs to be made, this type of leadership can serve a purpose, but trying to have an autocratic style of management in place for long periods of time is just going to lead to headaches for all involved. This style of leadership is more suited for a prison setting or in the military and not so much for business management.

Democratic Management Style

A democratic manager is willing to share work with his staff by delegating it to get the job done. You are banking on the competency of your team to get the job done on time and to have it done correctly. Employees love this type of  management style in business because they feel involved and part of the process. Their job performance is likely to be better than in an autocratic setting, though giving them the authority to do the work may lead some to rely on other to bear the brunt of the work on the project. Also, depending on what type of work it is, employees may feel like the work is being pushed off on them because you as a manager don’t feel like doing it.
Getting too many people involved in the project or process could slow the work down. It could also mean less time for you to concentrate on your work as your team asks questions and waits on your answers before proceeding to the next steps.

Participative Management Style

Also sometime known as consultative management style, this decision making style in management revolves around getting lots of feedback from your staff before coming to a conclusion and making a decision. This means that the process can take a bit longer as there are more voices to be heard, but getting a consensus on major decisions can lead to buy in from those who might otherwise have been opposed to the implementation of such changes. The downside to this style of management and leadership is that employees may feel that you don’t value their opinion or are too stubborn if after all of the feedback is received you go off and make the decision in your own without incorporating any of their feedback.
If you are going to make company or departmental policy changes, this type of style can make the team feel involved and more apt to go with the flow of whatever changes are coming down. This style also works well for brainstorming sessions as you work on new product ideas or marketing promotions.

Laissez Faire Management Style

In this leadership management style, the team is given the freedom to complete the job or tasks in any way they deem it should be done. It is a hands off approach at the management level in terms of direction, but the manager is there to answer questions and provide guidance as needed. This is a good way to help develop individual contributors into leaders which is only going to serve to make your team stronger ion the long run. On the flip side, it can lead to conflict on the team is some employees try to assume the role as a leader in the interim or to dictate to others how their work should be done.

THE JOHARI WINDOW MODEL

THE JOHARI WINDOWS MODEL

The Johari Window model is a simple and useful tool for illustrating and improving self-awareness, and mutual understanding between individuals within a group. The Johari Window model can also be used to assess and improve a group's relationship with other groups. The Johari Window model was devised by American psychologists Joseph Luft and Harry Ingham in 1955, while researching group dynamics at the University of California Los Angeles. The model was first published in the Proceedings of the Western Training Laboratory in Group Development by UCLA Extension Office in 1955, and was later expanded by Joseph Luft. Today the Johari Window model is especially relevant due to modern emphasis on, and influence of, 'soft' skills, behaviour, empathy, cooperation, inter-group development and interpersonal development.
The Johari Window concept is particularly helpful to understanding employee/employer relationships within the Psychological Contract.Over the years, alternative Johari Window terminology has been developed and adapted by other people - particularly leading to different descriptions of the four regions, hence the use of different terms in this explanation. Don't let it all confuse you - the Johari Window model is really very simple indeed.
Luft and Ingham called their Johari Window model 'Johari' after combining their first names, Joe and Harry. In early publications the word appears as 'JoHari'. The Johari Window soon became a widely used model for understanding and training self-awareness, personal development, improving communications, interpersonal relationships, group dynamics, team development and inter-group relationships.
The Johari Window model is also referred to as a 'disclosure/feedback model of self awareness', and by some people an 'information processing tool'. The Johari Window actually represents information - feelings, experience, views, attitudes, skills, intentions, motivation, etc - within or about a person - in relation to their group, from four perspectives, which are described below. The Johari Window model can also be used to represent the same information for a group in relation to other groups. Johari Window terminology refers to 'self' and 'others': 'self' means oneself, ie, the person subject to the Johari Window analysis. 'Others' means other people in the person's group or team.
N.B. When the Johari Window model is used to assess and develop groups in relation to other groups, the 'self' would be the group, and 'others' would be other groups. However, for ease of explanation and understanding of the Johari Window and examples in this article, think of the model applying to an individual within a group, rather than a group relating to other groups.
The four Johari Window perspectives are called 'regions' or 'areas' or 'quadrants'. Each of these regions contains and represents the information - feelings, motivation, etc - known about the person, in terms of whether the information is known or unknown by the person, and whether the information is known or unknown by others in the group.

Johari Window Four Regions

1. what is known by the person about him/herself and is also known by others - open area, open self, free area, free self, or 'the arena'
2. what is unknown by the person about him/herself but which others know - blind area, blind self, or 'blindspot'
3. what the person knows about him/herself that others do not know - hidden area, hidden self, avoided area, avoided self or 'facade'
4. what is unknown by the person about him/herself and is also unknown by others - unknown area or unknown self

 Johari Window Four Regions - Model Diagram

 
This is the standard representation of the Johari Window model, showing each quadrant the same size. The Johari Window 'panes' can be changed in size to reflect the relevant proportions of each type of 'knowledge' of/about a particular person in a given group or team situation.
In new groups or teams the open free space for any team member is small because shared awareness is relatively small. As the team member becomes better established and known, so the size of the team member's open free area quadrant increases.
 Johari Window Model - explanation of the four regions
 Johari Quadrant 1 - 'Open Self/Area' or 'Free Area' or 'Public Area', or 'Arena'
Johari region 1 is also known as the 'area of free activity'. This is the information about the person - behaviour, attitude, feelings, emotion, knowledge, experience, skills, views, etc - known by the person ('the self') and known by the group ('others').
The aim in any group should always be to develop the 'open area' for every person, because when we work in this area with others we are at our most effective and productive, and the group is at its most productive too. The open free area, or 'the arena', can be seen as the space where good communications and cooperation occur, free from distractions, mistrust, confusion, conflict and misunderstanding. Established team members logically tend to have larger open areas than new team members. New team members start with relatively small open areas because relatively little knowledge about the new team member is shared. The size of the open area can be expanded horizontally into the blind space, by seeking and actively listening to feedback from other group members. This process is known as 'feedback solicitation'. Also, other group members can help a team member expand their open area by offering feedback, sensitively of course. The size of the open area can also be expanded vertically downwards into the hidden or avoided space by the person's disclosure of information, feelings, etc about him/herself to the group and group members. Also, group members can help a person expand their open area into the hidden area by asking the person about him/herself. Managers and team leaders can play an important role in facilitating feedback and disclosure among group members, and in directly giving feedback to individuals about their own blind areas. Leaders also have a big responsibility to promote a culture and expectation for open, honest, positive, helpful, constructive, sensitive communications, and the sharing of knowledge throughout their organization. Top performing groups, departments, companies and organizations always tend to have a culture of open positive communication, so encouraging the positive development of the 'open area' or 'open self' for everyone is a simple yet fundamental aspect of effective leadership.

Johari Quadrant 2 - 'Blind Self' or 'Blind Area' or 'Blindspot'

Johari region 2 is what is known about a person by others in the group, but is unknown by the person him/herself. By seeking or soliciting feedback from others, the aim should be to reduce this area and thereby to increase the open area ie, to increase self-awareness. This blind area is not an effective or productive space for individuals or groups. This blind area could also be referred to as ignorance about oneself, or issues in which one is deluded. A blind area could also include issues that others are deliberately withholding from a person. We all know how difficult it is to work well when kept in the dark. No-one works well when subject to 'mushroom management'. People who are 'thick-skinned' tend to have a large 'blind area'.
Group members and managers can take some responsibility for helping an individual to reduce their blind area - in turn increasing the open area - by giving sensitive feedback and encouraging disclosure. Managers should promote a climate of non-judgemental feedback, and group response to individual disclosure, which reduces fear and therefore encourages both processes to happen. The extent to which an individual seeks feedback, and the issues on which feedback is sought, must always be at the individual's own discretion. Some people are more resilient than others - care needs to be taken to avoid causing emotional upset. The process of soliciting serious and deep feedback relates to the process of 'self-actualization' described in Maslow's Hierarchy of Needs development and motivation model.

Johari Quadrant 3 - 'Hidden Self' or 'Hidden Area' or 'Avoided Self/Area' or 'Facade'

Johari region 3 is what is known to ourselves but kept hidden from, and therefore unknown, to others. This hidden or avoided self represents information, feelings, etc, anything that a person knows about him/self, but which is not revealed or is kept hidden from others. The hidden area could also include sensitivities, fears, hidden agendas, manipulative intentions, secrets - anything that a person knows but does not reveal, for whatever reason. It's natural for very personal and private information and feelings to remain hidden, indeed, certain information, feelings and experiences have no bearing on work, and so can and should remain hidden. However, typically, a lot of hidden information is not very personal, it is work- or performance-related, and so is better positioned in the open area.
Relevant hidden information and feelings, etc, should be moved into the open area through the process of 'disclosure'. The aim should be to disclose and expose relevant information and feelings - hence the Johari Window terminology 'self-disclosure' and 'exposure process', thereby increasing the open area. By telling others how we feel and other information about ourselves we reduce the hidden area, and increase the open area, which enables better understanding, cooperation, trust, team-working effectiveness and productivity. Reducing hidden areas also reduces the potential for confusion, misunderstanding, poor communication, etc, which all distract from and undermine team effectiveness.
Organizational culture and working atmosphere have a major influence on group members' preparedness to disclose their hidden selves. Most people fear judgement or vulnerability and therefore hold back hidden information and feelings, etc, that if moved into the open area, ie known by the group as well, would enhance mutual understanding, and thereby improve group awareness, enabling better individual performance and group effectiveness.
The extent to which an individual discloses personal feelings and information, and the issues which are disclosed, and to whom, must always be at the individual's own discretion. Some people are more keen and able than others to disclose. People should disclose at a pace and depth that they find personally comfortable. As with feedback, some people are more resilient than others - care needs to be taken to avoid causing emotional upset. Also as with soliciting feedback, the process of serious disclosure relates to the process of 'self-actualization' described in Maslow's Hierarchy of Needs development and motivation model.
Johari Quadrant 4 - 'Unknown Self' or 'Area of Unknown Activity' or 'Unknown Area'
Johari region 4 contains information, feelings, latent abilities, aptitudes, experiences etc, that are unknown to the person him/herself and unknown to others in the group. These unknown issues take a variety of forms: they can be feelings, behaviours, attitudes, capabilities, aptitudes, which can be quite close to the surface, and which can be positive and useful, or they can be deeper aspects of a person's personality, influencing his/her behaviour to various degrees. Large unknown areas would typically be expected in younger people, and people who lack experience or self-belief.
Examples of unknown factors are as follows, and the first example is particularly relevant and common, especially in typical organizations and teams:

• an ability that is under-estimated or un-tried through lack of opportunity, encouragement, confidence or training
• a natural ability or aptitude that a person doesn't realise they possess
• a fear or aversion that a person does not know they have
• an unknown illness
• repressed or subconscious feelings
• conditioned behaviour or attitudes from childhood

The processes by which this information and knowledge can be uncovered are various, and can be prompted through self-discovery or observation by others, or in certain situations through collective or mutual discovery, of the sort of discovery experienced on outward bound courses or other deep or intensive group work. Counselling can also uncover unknown issues, but this would then be known to the person and by one other, rather than by a group.
Whether unknown 'discovered' knowledge moves into the hidden, blind or open area depends on who discovers it and what they do with the knowledge, notably whether it is then given as feedback, or disclosed. As with the processes of soliciting feedback and disclosure, striving to discover information and feelings in the unknown is relates to the process of 'self-actualization' described in Maslow's Hierarchy of Needs development and motivation model.
Again as with disclosure and soliciting feedback, the process of self discovery is a sensitive one. The extent and depth to which an individual is able to seek out discover their unknown feelings must always be at the individual's own discretion. Some people are more keen and able than others to do this.
Uncovering 'hidden talents' - that is unknown aptitudes and skills, not to be confused with developing the Johari 'hidden area' - is another aspect of developing the unknown area, and is not so sensitive as unknown feelings. Providing people with the opportunity to try new things, with no great pressure to succeed, is often a useful way to discover unknown abilities, and thereby reduce the unknown area.
Managers and leaders can help by creating an environment that encourages self-discovery, and to promote the processes of self discovery, constructive observation and feedback among team members. It is a widely accepted industrial fact that the majority of staff in any organization are at any time working well within their potential. Creating a culture, climate and expectation for self-discovery helps people to fulfil more of their potential and thereby to achieve more, and to contribute more to organizational performance.
A note of caution about Johari region 4: The unknown area could also include repressed or subconscious feelings rooted in formative events and traumatic past experiences, which can stay unknown for a lifetime. In a work or organizational context the Johari Window should not be used to address issues of a clinical nature.
Johari Window Example - Increasing Open Area Through Feedback Solicitation

 

The open area can also be developed through the process of disclosure, which reduces the hidden area.The unknown area can be reduced in different ways: by others' observation (which increases the blind area); by self- discovery (which increases the hidden area), or by mutual enlightenment - typically via group experiences and discussion - which increases the open area as the unknown area reduces.

A team which understands itself - that is, each person having a strong mutual understanding with the team - is far more effective than a team which does not understand each other- that is, whose members have large hidden, blind, and/or unknown areas.Team members - and leaders - should always be striving to increase their open free areas, and to reduce their blind, hidden and unknown areas.A person represented by the Johari Window example below will not perform to their best potential, and the team will fail to make full use of the team's potential and the person's potential too. Effort should generally be made by the person to increase his/her open free area, by disclosing information about his/her feelings, experience, views, motivation, etc, which will reduce the size of the hidden area, and increase the open free area.Seeking feedback about the blind area will reduce the blind area, and will increase the open free area. Discovery through sensitive communications, active listening and experience, will reduce the unknown area, transferring in part to the blind, hidden areas, depending on who knows what, or better still if known by the person and others, to the open free area.
 Johari Window Model - Example for New Team Member or Member Within a New Team

 

This Johari Window model diagram is an example of a member of a new team or a person who is new to an existing team.The open free region is small because others know little about the new person.Similarly the blind area is small because others know little about the new person.
The hidden or avoided issues and feelings are a relatively large area.In this particular example the unknown area is the largest, which might be because the person is young, or lacking in self-knowledge or belief.

Johari Window Example - Established Team Member Example

 

 This Johari Window model diagram is an example of an established member of a team The open free region is large because others know a lot about the person that the person also knows.Through the processes of disclosure and receiving feedback the open area has expanded and at the same time reduced the sizes of the hidden, blind and unknown areas.

It's helpful to compare the Johari Window model to other four-quadrant behavioural models, notably Bruce Tuckman's Forming, Storming Norming Performing team development model; also to a lesser but nonetheless interesting extent, The Hersey-Blanchard Situational Leadership team development and management styles model . The common principle is that as the team matures and communications improve, so performance improves too, as less energy is spent on internal issues and clarifying understanding, and more effort is devoted to external aims and productive output.The Johari Window model also relates to emotional intelligence theory (EQ), and one's awareness and development of emotional intelligence.As already stated, the Johari Window relates also to Transactional Analysis (notably understanding deeper aspects of the 'unknown' area, region 4).The Johari Window processes of serious feedback solicitation, disclosure, and striving to uncover one's unknown area relate to Maslow's 'self-actualization' ideas contained in the Hierarchy of Needs.

BCG MATRIX /PORTFOLIO MATRIX

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment.
According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership.
BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBU’s are in same industry, the average growth rate of the industry is used. While, if all the SBU’s are located in different industries, then the mid-point is set at the growth rate for the economy.
Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

1. Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures.
2. Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBU’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued.
3. Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share. If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars.
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.

BCG Matrix is also called as Portfolio Matrix because it is used for allocating resources among products or strategic business units on the basis of relative market share and market growth rate :

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. But BCG Matrix is not free from limitations, such as-

1. BCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can earn even more than cash cows sometimes.
6. This four-celled approach is considered as to be too simplistic.

Growth strategy matrix/Ansoff's Matrix

Ansoff’s matrix identifies alternative growth strategies by looking at present and potential products in current and future markets. The four growth strategies are market penetration, market development, product development and diversification

# Market Penetration - Market Penetration is growth strategy in which an organization try to increase their market share by selling more with  existing product into a market in which it has a prior presence.

For Example-Tooth paste maker such as Colgate and HUL try to capture more market share of already existing market with existing product such as in India . It may include aggressive advertisement , offers ,etc to penetrate more into existing market

# Product Development - Product Development is growth strategy  that is used by marketer in order to increase their market share by introducing new product into existing market . According to this strategy an organization try to stimulate its growth by adding new product into its portfolio  into existing market where they are already doing business . This strategy is very common in highly competitive market .

For Example - Colgate and Pamolive introduce Colgate Salt as their new product  in highly competitive market of tooth paste . By introducing new product Colgate wants to get more market share.

# Market Development - When market is saturated into existing market , in order to keep pace of growth ,an organization adopted Market development strategy to grow itself. According to this strategy an organization try to enter into new market with existing product portfolio in order to grow itself.

For Example -Pizza Hut and McD is opening their outlets in India and thus adopted strategy of Market development to grow themselves. They are entering into market with existing product .

#Diversification-   The strategies of diversification can include internal development of new products or markets, acquisition of a firm, alliance and joint venture with a complementary company, licensing  of new technologies, and distributing or importing a product line manufactured by another firm .

For Example - When any company try to make joint venture with totally new company of different product then they adopt diversification strategy . This strategy is very popular among large organization to diversify their risk and grow itself with totally new product into new market. Bharti is one of the conglomerate of telecome Industry , but it Joint Venture with AXA of French Insurance company  to from joint venture Bharti AXA in India. So Bharti included insurance product into its portfolio to diversify itself.

Managemnt Lesson when You are in problem

A little bird was flying to distant place in order to get protected from winter. It was so cold the bird froze and fell to the ground into a large field. While he was lying there, a cow came by and dropped some dung on him. As the frozen bird lay there in the pile of cow dung, he began to realize how warm he was. The dung was actually thawing him out! He lay there all warm and happy, and soon began to sing for joy. A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung, promptly dug him out and ate him.
Moral of the story:
(1) Not everyone who shits on you is your enemy.
(2) Not everyone who gets you out of shit is your friend.
(3) And when you’re in deep shit, it’s smart to keep your mouth shut.