Planning Product Line Strategy: A Matrix Approach

Abstract

anticipated performance of its products. This information should encompass both (1) consumer evaluation of the company's products, particularly their strengths and weaknesses vis a vis competition (i.e., product positioning by market segment information); and (2) information on actual and anticipated product performance on relevant criteria such as sales, profits, and market share. Whereas much has been written in recent years about the use of product positioning in strategic marketing planning,' little new information has been published about formal methods of using the product's actual and anticipated performance characteristics in terms of sales, profits, and market share as inputs to the design of a strategic marketing plan for the firm's existing product line. Several attempts have been made to use product sales (or, more explicitly, stage in the product life cycle) as a guideline for marketing strategy, including specific recommendations on items such as the type and level of advertising, pricing, and distribution.2 Yet these recommendations have usually been vague, nonoperational, not empirically supported, and conceptually questionable, since they imply that strategies can be developed with little concern for the product's profitability and market share position.3 In the 1970s, some attention has been given to va ious aspects of sales, market share, and profitability as guidelines for marketing planning. Most notable of these efforts are the Marketing Science Institute's PIMS (Profit Impact of Market Strategy) project, which examines the determinants of profitability in the modern corporation,4 and the Boston Consulting Group's product portfolio analysis.s These approaches do not, however, provide a comprehensive approach for product line planning based on all three measures-sales, market share, and profitability-which are integrally tied to positioning the product by market segment. The objective of this

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