BCG Matrix- How To Use, Insights and Free Templates

 

The BCG Matrix was initially sketched by Alan Zakon, a senior executive at BCG, and was later refined by Bruce Henderson, the founder of BCG, in his 1970 essay The Product Portfolio.

The BCG Matrix gained widespread use during the 1970s and was adopted by many Fortune 500 companies to manage diversification.

The BCG Matrix is still widely used today, although modern business dynamics have introduced new complexities that the traditional matrix did not fully account for​.

What is the BCG Matrix?

The BCG Matrix, also known as the Growth-Share Matrix, is a strategic framework developed by the Boston Consulting Group in 1970.

It helps firms evaluate their product portfolios by categorising products into four quadrants based on market growth rate and relative market share.

The matrix offers guidance on where firms should invest, divest, or maintain, and how they can best allocate resources across their product lines.

A Guide to the BCG Matrix

Market Growth

Traditional View:
The market growth rate refers to how attractive a market is in terms of expansion opportunities.

High-growth markets offer potential for revenue growth, while low-growth markets often represent maturity or saturation.

Traditionally, companies invested heavily in high-growth markets and maintained profitability with minimal investment in low-growth markets​.

Contemporary View:
In today’s business landscape, high-growth markets are more volatile and susceptible to disruption.

Rapid technological shifts and shorter product lifecycles often complicate long-term investment strategies.

For digital sectors, growth cycles are shorter, and companies must continuously adapt to remain competitive.

Key considerations:

• Volatility: High-growth markets are more vulnerable to economic fluctuations and technological advancements.
• Short product lifecycles: Digital products often experience faster saturation.
• Disruptive technologies: Technological innovations can rapidly change the market landscape​

Market Share

Traditional View:
Relative market share measures a product’s competitive strength compared to its largest rival.

Higher market share traditionally correlates with competitive advantages like economies of scale and increased profitability.

Products with low market share typically require substantial investment to become competitive​.

Contemporary View:
In today’s service-based and digital sectors, market share is not always the best measure of success.

For example, network effects, customer retention, and recurring revenue models often hold more importance than traditional market dominance.

Smaller, agile organisations can outcompete larger players by focusing on customer experience and innovation.

Key considerations:

• Network effects: In digital industries, user engagement and network growth often outweigh traditional market share.
• Scalability: Digital products can achieve rapid growth without high market share.
• Recurring revenue: Subscription business models focus on customer retention rather than market dominance​

The Four Sections of the BCG Matrix

BCG Matrix: Cash Cows (High Market Share, Low Growth)

Traditional View:
Cash Cows are products with high market share in low-growth or mature markets. These products generate reliable cash flow with minimal investment, as competition is limited. Firms often use profits from Cash Cows to fund investments in Stars or Question Marks​.

Contemporary Insights:
While Cash Cows continue to be valuable for maintaining financial stability, firms today also use them to drive innovation and diversify product offerings.

Markets evolve and so firms need to regularly reassess their relevance and explore incremental improvements or new customer segments.

Strategic Decisions:

• Maximise profitability: Focus on cost-efficiency to sustain cash flow.
• Invest in innovation: Use steady cash flow to fund innovation or enter adjacent markets.
• Diversify product lines: Extend product offerings to maintain customer interest​.

Example: Procter & Gamble’s Pampers brand generates significant cash flow, allowing the company to invest in developing new products​.

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BCG Matrix: Dogs (Low Market Share, Low Growth)

Traditional View:
Dogs are products with low market share and limited growth potential. These products often underperform financially, generating little to no profit. Traditionally, companies divested Dogs to redirect resources to more promising ventures​.

Financial Perspective:
From a financial standpoint, Dogs contribute minimally to revenue and may generate losses. Maintaining Dogs ties up capital and resources that could be better deployed elsewhere.

Companies that divest Dogs can improve profitability by reducing overhead costs and reallocating resources to higher-growth areas​.

Contemporary Insights:
Some Dogs can still offer strategic value, especially in niche markets. These products might provide customer insights, create synergies with other units, or generate steady, if modest, revenue. Firms should weigh up these benefits against the financial strain these products impose.

Strategic Decisions:

• Divest or exit: Most Dogs should be divested to free up resources for more promising products.
• Reposition for niche markets: Dogs may succeed in smaller, specialised markets with less competition.
• Reduce costs: Implement cost-cutting measures to minimise the financial burden​.

Example: Apple’s iPad is now considered a Dog, yet Apple continues to produce it for a loyal customer base​.

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BCG Matrix: Question Marks (Low Market Share, High Growth)

Traditional View:
Question Marks are products with low market share in high-growth markets. They require substantial investment to increase market share, with the potential to become Stars. However, if they fail to gain traction, they risk becoming Dogs​(Boston Consulting Group…).

Contemporary Insights:
In the digital economy, Question Marks face more risk due to rapid changes in consumer preferences and technology.

Firms can employ agile methodologies to test the viability of a product before fully committing resources which reduces the risk of over investing in the early stages of development.

Strategic Decisions:

• Invest selectively: Carefully assess potential before committing significant resources to growing market share.
• Test and iterate: Use agile approaches to validate market demand.
• Divest early: Exit the market if growth prospects are weak​(Understanding the BCG G…)​(Boston Consulting Group…).

Example: Apple TV remains a Question Mark, with Apple investing heavily in content while competing against dominant players like Netflix​(What Is the Growth Shar…).

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BCG Matrix: Stars (High Market Share, High Growth)

Traditional View:
Stars are products with high market share in high-growth markets. These products often require substantial investment to maintain their leadership positions but have the highest potential for growth. Stars are key drivers of future revenue and, as the market matures, often transition into Cash Cows​(Boston Consulting Group…).

Contemporary Insights:
In tech-driven markets, Stars face constant competition and shorter product life cycles. Companies must continuously innovate to maintain their market leadership. Agility and a deep understanding of consumer trends are essential to maintaining a Star’s status.

Strategic Decisions:

• Sustain high investment: Continue investing in growth to maintain leadership.
• Explore integration opportunities: Use vertical or horizontal integration to strengthen market position.
• Prepare for market maturation: Plan for the product’s transition into a Cash Cow as the market matures​.

Example: The iPhone remains Apple’s Star, commanding high market share and driving significant revenue, while Apple invests in R&D to maintain its competitive edge​.

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BCG Matrix Example

The BCG Model is based on products rather than services, however, it does apply to both. You could use this if reviewing a range of products, especially before starting to develop new products.

Looking at the British retailer, Marks & Spencer, they have a wide range of products and many different lines. We can identify every element of the BCG matrix across their ranges:

• Stars

Example: Lingerie. M&S was known as the place for ladies underwear at a time when choice was limited. In a multi-channel environment, M&S lingerie is still the UK’s market leader with high growth and high market share.

• Question Marks/Problem Child

Example: Food. For years M&S refused to consider food and today has over 400 Simply Food stores across the UK. Whilst not a major supermarket, M&S Simply Food has a following which demonstrates high growth and low market share.

• Cash Cows

Example: Classic range. Low growth and high market share, the M&S Classic range has strong supporters.

• Dogs

Example: Autograph range. A premium-priced range of men’s and women’s clothing, with low market share and low growth. Although placed in the dog category, the premium pricing means that it makes a financial contribution to the company.

Conclusion: Strategic Importance of the BCG Matrix

You can also apply the BCG model to areas other than your product strategy.

For example, I developed this matrix as an example of how a brand might evaluate its investment in various marketing channels.

The medium is different, but the strategy remains the same –  milk the cows, don’t waste money on the dogs, invest in the stars and give the question marks some experimental funds to see if they can become stars.

Whether you’re strategising for growth or assessing performance, these ready-to-use templates will help you visualise your company’s market position and make informed decisions.

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Beyond Competitive Advantage

We’ve discussed the term ‘competitive advantage’ more than once, as described in the book ‘Competitive Advantage’ by Michael Porter. However, competitive advantage is merely one way of gaining strategic advantage.

Once we incorporate the ROUNDMAP™ Full Stack in our strategic thinking, there appear to be four strategic advantage orientations in what we call the Strategic Advantage Matrix™:

• Competitive Advantage (product-centric)
• Comparative Advantage (customer-centric)
• Compositive Advantage (resource-centric)
• Collaborative Advantage (network-centric)

Competitive Advantage

Michael Porter focused on competitive strategy and competitive advantages. He mentioned three directions in which a business could develop its corporate strategy:

1. Cost leadership (compare to value discipline: Operational Excellence, Treacy & Wiersema)
2. Differentiation (compare to value discipline: Product Leadership, Treacy & Wiersema)
3. Focus (compare to value discipline: Customer Intimacy, Treacy & Wiersema)

However, each of these three directions has to be seen in the context of the only known business model in his time: Product Centricity. As such, competitive advantages aim to increase product value (equity) through growing market share and economies of scale, which are typical for a product-centric business.

Comparative Advantage

A customer-centric business has no intention to differentiate on product-level. Instead, it differentiates on customer-level by focusing on a select group of customers for which it can fulfill more of their needs over the course of the customer relationship, or customer lifetime. What the business should, therefore, look for is a comparative advantage:

1. What group of customers with similar needs can we identify?
2. To grow our business, we need to increase customer value by having these selected customers spend more, more often, and over a longer period of time (RFM).
3. And finally: Can we find more customers like them?

Compositive Advantage

In a resource-centric business, it is mostly about service differentiation, based on a composition of resources, syndicated from multiple sources. What package of resources and services will be most valued by your customers?

Collaborative Advantage

Finally, a network-centric business depends on the value exchange between participants. How can it create a marketspace in which each participant can collaborate, by adding and/or subtracting value from other participants?

One final note: similar to the value disciplines and the experience design, you’ll have to keep a threshold on all four advantages.

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Schematic representation, as part of the ROUNDMAP™ Full Stack (with an accent on the yellow horizontal bar):

Blue Ocean versus Red Ocean

In a blue ocean, innovation flourishes while competition is absend or low. Contrary, in a red ocean, competition is often fierce, while most innovation is limited to maintaining one’s position relative to the competition.

Product-centric operations are almost without exception part of a highly competitive landscape, therefore, it is vital to have a competitive advantage. Obviously, in a red ocean supply and demand are often known factors, the only variable is market share. To obtain market share, firm’s need to focus on a market segment, differentiate from the competition, be cost-effective, offer relevant value, design exceptional experiences, engage customers, etc.

However, in a blue ocean things are much brighter. Although supply and demand are yet unknown, it allows a firm to focus on creating and delivering value that is truly appreciated by its customers, while higher margins per sale often compensate for the size of the market.

While Resource Centricity and Network Centricity aren’t new (I’ve described them as such, however, they are in fact as old as commerce), the internet has given both business models an incredible edge over their product-centric counterparts by taking away physical barriers. This allowed companies like Facebook, Amazon, Alibaba, Uber, Google, and TakeAway to flourish, often claiming 80% of more of market share.

Example of product-centricity differentiation

While fashion brand A might be perceived as operational-excellent (also known as cost leadership), because of its high level of automation that is driving down cost, fashion brand B is perceived as a product leader, because of its ability to offer a wide range of colors for its products. Both are product-centric, yet they are perceived differently. Besides, brand A’s competitive advantage is based on crossing data-silos, while brand B derives most of its competitive advantage from its highly flexible fabric-dyeing production line.

https://roundmap.com/ 

The Significance of Market Share

 

Written by B2B International

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The ultimate proof of a successful marketing strategy is a high market share: the higher, the better. This should not be at the expense of profits; any fool can give their products away—but more on this later. Once attained, market dominance brings many advantages—volume production brings economies of scale, a grip can be exerted on distribution, premium prices can be charged, etc.

Companies with market shares in excess of 40% have twice the profitability of those with only a 10% market share. It is estimated that for every 10% increase in market share, the return on investment rises by 5%.

Three factors are important in building market share:

1. The continuous and frequent launch of new products. Rick Goings, CEO of Tupperware, said in a recent interview with the Financial Times “You’ve got to look for new product opportunities. Our benchmark is that 25 per cent of sales have to come from new products”. New products bring new sales and new sales increase market share.

2. The maintenance and continuous improvement of quality products. Companies that consistently build market share in the automotive industry, in telecommunications, and in any business to business market are more usually those that demonstrate that their products are of the highest quality. Witness Apple, Audi, BMW, JCB, Caterpillar, Boeing, Deere, Nike, Coca-Cola, Disney and the like.

3. A high level of activity by the sales force. Marketers know that high levels of promotional expenditure build market share. In business to business markets, the efforts of the sales force are critically important here and any financial stringency that results in cutbacks of this important activity will threaten the market share.

Market shares are an indicator of the relative strength of a supplier to a market. It is vital intelligence for any company developing its marketing strategy. It is also surprising how ignorant managers can be of their market share. A VP of Marketing whose gut feel tells him that he has a 20% market share may be making incorrect decisions if in fact his market share is nearer 10% and the market is two thirds larger than he thought. Interestingly, most people lacking perfect knowledge exaggerate or are over-optimistic about their market share rather than thinking that it is smaller than it actually is.

Market share also needs to be seen in the context of the definition of the market. Has Kellogg’s got a 90% share of the cornflake market, or a 50% share of the breakfast cereal market or a 5% share of the breakfast market? Depending on how you define your market determines the strategy you will adopt.

Companies can assess their market share in different ways. The lucky ones are part of a trade association or group that contributes data enabling them to determine their market share over time. Even here there can be errors in the calculation as not everyone will be part of the trade association and thus supplying figures.

Estimates of market share can also be made by assessing the size of the market and expressing a company’s revenue as a proportion of that total. This assumes that an accurate assessment can be made of the market size which is in itself a difficult calculation to make. In business to business markets the assessment of market size can often be + or-20%. Furthermore, this doesn’t give market share data on the competition. To achieve this it is necessary to have a good fix on the competitors’ revenues within that market and to express these out of the total market size. Sometimes financial reports provide revenue data on the competition but, more usually, there is obfuscation in that product revenue is not separated out in any detail.

This leaves us with the most tried and trusted way of assessing market share, which is to carry out an industry survey over a representative sample of companies buying the products in question. In order to calculate the market share, it is not just a question of asking respondents which companies are used as suppliers, but to get them to provide a breakdown of their purchases from each supplier. Inevitably, there will be some estimates but over a reasonable sample size the results can be expected to be accurate. Such surveys are not cheap and provide a snapshot at just one point in time. If surveys of this kind are repeated every six months or every year to track the market share, it is an expensive process.

Market share is important but at what price? This is a difficult and contentious question to answer and it was raised at the beginning of the note. In 2013 Amazon adopted an aggressive strategy to build market share. Over the first nine months of 2013 it reported quarterly operating profit margins of 1.9%, then 1.1%, and latterly 0.5%. Prices have been sharpened to build revenue and share. The result so far has been losses and an operating margin in October 2013 which was -0.1%. It is significant that investors have faith in this strategy because, despite the decline in profitability, Amazon’s share price has risen 57% during the year. The market is betting (and it probably is right) that this search for increased market share will bring with it profitability in the long run.

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Market Share: The Most Important Metric for Business Success

Market share is the most important metric companies can use to judge the effectiveness of any possible revenue generating effort, such as marketing campaigns, branding initiatives, or CRM programs.

The reason for this is simple – market share shows you how you are doing compared to your competition, allows you to quantify the impact your strategies and tactical execution have had on business results, and ask questions of your performance that were previously unapparent to ask.

Yet, despite its importance, many companies ignore market share and instead focus on internal metrics such as satisfaction, awareness, loyalty, leads, revenue growth, etc.

The problem with these internally focused metrics is that they can be deceiving in that while the internally focused company may be happy with its results, this satisfaction could be misleading if the company’s performing below par relative to the competition.

But, it’s not just internally focused companies that don’t calculate market share.

Most companies don’t have the competitive data necessary to measure market share, which is why it has been mainly restricted to academia, as theory taught in classrooms.

The attempts that have been made to calculate market share have been at best a complex guessing game relying on partial and inaccurate data derived from publicly reported figures or from the participating members of industry consortiums.

But, even then, the information was never comprehensive and never available at the levels of granularity needed to make actionable business decisions.

In fact, because most companies don’t engage in comprehensive competitor monitoring or are excessively optimistic, they overestimate their market shares by a factor of two.

The companies without the will or interest to accurately calculate their true market share need to understand the importance of this metric and the peril they place on themselves when they operate without this guide post.

Why is a true, unbiased calculation of your market share so important?

Because market share is a key indicator of market competitiveness, it enables executives to judge total market growth or decline, identify key trends in consumer behavior and see their market potential and market opportunity.

Furthermore, by understanding market share, companies can objectively measure pricing strategies, consumer perception of new products/services, promotions, management personnel, real estate decisions and other key business initiatives.

You may be thinking, this is all well and good, but now what? There is no standard way to measure it.

Well, that’s where you’re mistaken.

Now, for the first time, there’s a way to accurately and objectively calculate your market share – Buxton’s Market Share Solution.

Through a relationship with a credit card provider, Buxton is able to access both you and your aggregated competitors’ de-identified credit and debit card transactions, which enables us to accurately and objectively quantify your market share at all levels of your organization – from the very top down to individual locations.

This market share report supports your ability to understand the impact your business strategies and their execution have had on your revenue and allows you to evaluate both your short and long-term trends in market share and competitive presence.

It gives you the ability to differentiate and quantify the revenue growth and loss you have impacted and to understand the growth and loss which has resulted from changes in the market that were beyond your control.

By understanding your true market share, you can filter out market noise with a metric that is not impacted by macro-environmental variables and measure your impact to revenue across your organization using a consistent, unbiased metric for each location, market and in summary for your entire business.

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Economic objectives of firms

 The main objectives of firms are:

1. Profit maximisation
2. Sales maximisation
3. Increased market share/market dominance
4. Social/environmental concerns
5. Profit satisficing
6. Co-operatives

Sometimes there is an overlap of objectives. For example, seeking to increase market share, may lead to lower profits in the short-term, but enable profit maximisation in the long run.

Profit maximisation

Usually, in economics, we assume firms are concerned with maximising profit. Higher profit means:

• Higher dividends for shareholders.
• More profit can be used to finance research and development.
• Higher profit makes the firm less vulnerable to takeover.
• Higher profit enables higher salaries for workers

Alternative aims of firms

However, in the real world, firms may pursue other objectives apart from profit maximisation.

1. Profit Satisficing

• In many firms, there is a separation of ownership and control. Those who own the company (shareholders) often do not get involved in the day to day running of the company.
• This is a problem because although the owners may want to maximise profits, the managers have much less incentive to maximise profits because they do not get the same rewards, (share dividends)
• Therefore managers may create a minimum level of profit to keep the shareholders happy, but then maximise other objectives, such as enjoying work, getting on with other workers. (e.g. not sacking them) This is the problem of separation between owners and managers.
• This ‘principal-agent‘ problem can be overcome, to some extent, by giving managers share options and performance related pay although in some industries it is difficult to measure performance.
• More on profit-satisficing.

2. Sales maximisation

Firms often seek to increase their market share – even if it means less profit. This could occur for various reasons:

• Increased market share increases monopoly power and may enable the firm to put up prices and make more profit in the long run.
• Managers prefer to work for bigger companies as it leads to greater prestige and higher salaries.
• Increasing market share may force rivals out of business. E.g. the growth of supermarkets have lead to the demise of many local shops. Some firms may actually engage in predatory pricing which involves making a loss to force a rival out of business.

3. Growth maximisation

This is similar to sales maximisation and may involve mergers and takeovers. With this objective, the firm may be willing to make lower levels of profit in order to increase in size and gain more market share. More market share increases its monopoly power and ability to be a price setter.

4. Long run profit maximisation

In some cases, firms may sacrifice profits in the short term to increase profits in the long run. For example, by investing heavily in new capacity, firms may make a loss in the short run but enable higher profits in the future.

5. Social/environmental concerns

A firm may incur extra expense to choose products which don’t harm the environment or products not tested on animals. Alternatively, firms may be concerned about local community / charitable concerns.

• Some firms may adopt social/environmental concerns as part of their branding. This can ultimately help profitability as the brand becomes more attractive to consumers.
• Some firms may adopt social/environmental concerns on principal alone – even if it does little to improve sales/brand image.

6. Co-operatives

Co-operatives may have completely different objectives to a typical PLC. A co-operative is run to maximise the welfare of all stakeholders – especially workers. Any profit the co-operative makes will be shared amongst all members.

Diagram showing different objectives of firms

• Q1 = Profit maximisation (MR=MC)
• Q2 = Revenue Maximisation (MR=0)
• Q3 = Marginal cost pricing (P=MC) – allocative efficiency
• Q4 = Sales maximisation – maximum sales while still making normal profit (AR=ATC)

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Mobile phone market over 30 years

 

The Rules to increase market share

The Rules to Increase Market Share and Mistakes to Avoid

Every successful company or organization must be driven in a constant quest to increase market share. And there are rules to increasing market share. However, most companies fall far short of all the projections and annual planning.

When the chips are finally counted and the level of success is finally evaluated on a spreadsheet, expectations rarely meet reality. Even if the expectations are met, the real measure of success is not just in the percentage of growth in your market share. But in your measure of growth compared to competitors in your category.

Who Wins?

The REAL winner is the one whose growth comes at the expense of another competitor in the market. When individual revenues increase but lags the category, you are losing. You must win at someone else’s expense because, whether you want to admit it or not, most categories are mature. The only way to grow is to steal market share from the competition.

Here are some basic rules to grow market share and steal customers from your competitors — and some marketing mistakes to avoid.

Rules to increase market share. Rule number 1 — Never Believe Everything You Hear.

Don’t believe the internal hype surrounding your brand’s importance to the customer. This view is myopic because our own brands are never as important to our customers as it is to us. Being successful at increasing market share is hard earned — and you earn it by knowing more about your customer then anyone else in the category. Only then can you align your strategic brand and tactical marketing messages to reflect that knowledge.

It is not enough to know the demographics and usage habits of your customers or prospects. You must find what drives trial and incites loyalty beyond traditional product features and attributes. Product features and benefits provide the keys to opening the gate for entry in a competitive category.

The attributes that provide marketers with so much pride are rarely why a customer prefers one brand to another. If choice were always about product features and benefits, all market leading (winning) brands would have the best features and pricing. Are you the market leader? Does no one in your category have equal (or superior) service or product? Enough said. It is possible to live and die by features and attributes alone.

Get everyone on board

You are most likely the market leader if your R&D department keeps you miles ahead of the competition and your advertising budget is so large that you are always in the face of your prospects and customers touting your NEW AND IMPROVED.

To increase market share and win, you must up the ante onbeing smarter than the competition rather than focusing on simply being better. Your prospect/customer believes the purchase decisions that they make to be germinal to their own sense-of-self.

This sense-of-self is a more important factor in the mechanism of choosing than any product feature you can possibly imagine.

This is an emotional (right brain) value that R&D has no part in. The left-brain part of the purchase decision is reflected in the CATEGORY choice.

The logical part of all this

This is the cognitive part of the equation. This means that, when a customer seeks a solution, they evaluate product benefits to decide which category of offering they will choose. For example, if someone is purchasing an oven for their home, they will first choose a category of solutions — microwave, conventional, or convection oven.

Once they decide which of these category choices is the right decision, they will then seek out those players in that category. But how do they decide whether they want a VULCAN, Amana, GE, KitchenAid, or Jenn-Air?

That decision is not based on cognitive thinking. They will all cook food well. No, the final leg in the decision tree is an emotional evaluation and choice. It is a choice based on what the brand means to them rather than what the product does or does not do.

If you understand your customer better than the competition does, you will be in a position ensure that your brand promises more of “THAT” whatever “THAT” turns out to be. What we can promise is that “THAT” will not be about the benefits and features of your product or service. (Although features may fulfill the brand. But features alone are unemotional and unpersuasive.) Instead, “THAT” will be about who the prospect believes they are at the moment of purchase and how much your brand reflects their own beliefs about whom they aspire to be.

Rule to increase market share. Rule number 2 — Don’t’ Believe Your Own Hype

It is easy to get caught up in the self-serving belief that your product, people, and expertise are better than the competition.

You know the story — “We have better people!” Banks(i.e. Bank of America, Chase, and Wells Fargo), pharmacies (i.e. Walgreen’s CVS, and Rite Aid), and automobile dealerships (i.e. Ford, GM, Chrysler, KIA, Honda, and Volkswagen) are fond of building their marketing messages around this self-serving and foolish idea.

Let’s face facts — we all draw our employees from the same pool of workers. It is not only foolish to assume “our folks are better than your folks,” it is a ticket to certain disaster.

Being dispassionate must be your goal in developing a strategy. Factor out these category table stakes (the minimum requirements to gain permission to play in the category). Then create your marketing messages. At the same time, do everything you can to ensure that your work force is the best trained and best in the industry.

Think how many banks tout their table stakes (i.e. online banking, friendly people, and competitive rates). How many beer brands tout their table stakes (great taste, quality ingredients and a caring brew master)?

Destinations and Tourism brands want to increase market share too

Many destinations tout their table stakes (exotic locations, endearing natives and authentic cultures). Think how many automobile manufactures tout their table stakes (sexy design, great road handling and top-shelf engineering and attention to detail).

If all of these generic benefits were all that important, we would expect that there would be no Toyota, Budweiser, Apple, Walgreen’s, and Bahamas as market leaders. We would have a much more diverse market space with many main players.

So… forget all of those obvious and generic features and benefits. Look closer for real differences. Factor them out. What is left?

Then work as hard as you can to have the best tasting beer, best online banking site and friendliest employees. Just don’t expect your competition’s customers to choose your brand because of them. Do it because it is a best business practice not a marketing advantage

Rule to increase market share. Rule number 3 — Don’t Be Like the Market Leader

Copying the market leader is a major marketing mistake. When you copy the marketing message and style of the market leader, you are absolutely their very best friend. As long as Target and Kmart copy Walmart, they can expect Walmart to remain the runaway winner. Your strategy must be to be different.

Being a market leader has two distinct advantages.

1. Share of voice and top-of-mind awareness is often just enough. Woody Allen once said, “Half of success is just showing up.” As far as the market leader is concerned, he was mostly right.
2. Market also-rans are prone to copy the market leader’s successful messaging, which is a sure-fire way to help the market leader to keep on winning and remaining the king of the hill.

Think about this. Why should a customer choose AMD over Intel? The messaging and marketing looks the same and speaks to the same benefits. In a tie, who do you think wins? Why should a United Airlines customer choose to fly Delta Airlines if the messaging looks and feels the same?

Why should a computer purchaser choose Dell over HP? In each of these cases, the marketers believe they are communicating a benefit that matters to prospects. Mostly, they are preaching to the choir and helping the market leader lap the field.

Rule to increase market share. Rule number 4 — Be Consistent

Your greatest enemy is in confusing your brand strategy with your marketing tactics. Strategy always drives the tactics and ALWAYS remains consistent. Too many throw out their brand strategy because immediate results are not as successful as they initially hope. They panic. In most cases, there was nothing wrong with the strategy but the tactic used to deliver the message was flawed.

Napoleon once said that an Army that marches in the wrong direction and then turns around and goes back has made two mistakes instead of one. Toyota did not gain its market leadership by changing its brand marketing strategy on a whim.

Brand strategy is a long-term commitment and your own lack of commitment spells its doom.

When challenging a market leader, you need to be compelling. Be consistent so that the target market begins to see your brand as you have communicated it. Apple has changed tactics many times over the years. But its brand promise of the customer thinking differently and seeking simplicity has never waned.

Result — Be a Brand

Increasing market share at your competitors’ expense takes more than a catchy commercial and tagline. If your goal is to be smarter and better than your competition, you need to remain focused and disciplined. You need to have clarity in your brand space so that your potential customers can find you in the sea of choices that they are bombarded with everyday.

In such a competitive din of noise, with each demanding hatchling screaming, “Feed me,” your prospects will inevitable seek a means to simplify their decision process. Brand does that and nothing else does. Let your brand make it easier for them by reflecting the precepts and values that define their lives.