Question

1- The BCG matrix is used for what purpose?

to find the target markets where firms can position one or more of their product together(co- branding).

to segment the company products into more targeted groups

to identify the products in a firms portfolio that they should invest in

to make an easy chart for marketers to understand

2- new product failure ranges between:

15-30%

50-75%

30-50%

40-60%

Answer 1

Question – 1:

Answer is: to identify the products in a firm’s portfolio that they should invest in

Reason: Boston Consulting Group’s (BCG) portfolio matrix (or) the BCG Matrix defines the long-term strategic planning which will help in business growth opportunity by reviewing all the product portfolios, to which BCG class it belongs to and in which portfolio to invest to extract maximum profit.

Why other options are incorrect:

Co-branding is about mixing different brands to grow together. But BCG is all about the products of a single firm or brand.

Segmentation is not related to BCG matrix. BCG matrix shows Relative Market Share vs Market Growth Rate. Here the decision about investment is taken. The products are already targeted to the proper target group.

BCG is a marketing matrix from which various information can be abstracted regarding marketing and investment. But it is not just the purpose to provide easiness to the marketers.

Question – 2:

Answer is: 30-50%

Explanation: The new product failure rate depends on the industry. It is minimum in the healthcare industry (about 30%) to maximum in consumer products (about 49%). So the answer is 30-50%.

This has been answered on basis of the latest surveys conducted by top marketing research firms such as Nielsen, etc.

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