Page 65 - Foundations of Marketing

32 Part 1 | Strategic Marketing and Its Environment

Marketing Debate

Question Marks versus Stars: How to Decide?

ISSUE: What happens to customer choice when com- Even though question marks have low market
panies put their marketing dollars primarily into stars share, they do satisfy the needs of some customers,
rather than funding question marks? and they also round out customer choice. Should
companies invest to further develop and promote
Stars have high market share and bright prospects for these products, even if their current outlook isn’t
future sales and profits, although they require cash infu- as promising as for higher-growth products? Both
sions to continue their growth trajectory. Especially when General Motors and Nissan face such decisions with
economic conditions are challenging, companies may their electric vehicles. Several years after introducing
prefer to direct money toward stars rather than invest- the Chevrolet Volt electric car, General Motors has not
ing in question marks that need a big budget to advance achieved the hoped-for market share, and Nissan has
from a small market share position. Competition is also had a similar experience with its electric car, the Leaf.
a factor: Some corporate giants such as Unilever have Are electric vehicles question marks or stars? What
been concentrating their marketing investments in high- should companies do when they must choose where to
potential products, with an eye toward surpassing rivals invest their marketing dollars?
a
and setting the stage for long-term returns.

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market share. An example of a star might be Amazon’s Kindle. Cash cows have a domi-
nant share of the market, but low prospects for growth. They typically generate more cash
than is required to maintain market share. Bounty paper towels represent a cash cow for
Procter & Gamble because it is a product that consistently sells well. Dogs have a subordi-
nate share of the market and low prospects for growth. Dogs are often found in established
markets. The cathode ray tube television would probably be considered a dog by a company
like Panasonic, as most customers prefer flat screens. Question marks, sometimes called

Figure 2.3 Growth Share Matrix Developed by the Boston Consulting Group

Product-market growth High Cash cow Question mark
Star

Low
Dog

High Low
Relative market share

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