Marketing Assignment
Marketing Assignment
Marketing Assignment
STARS
Products that are in high growth markets and that make up a
sizable portion of that market are considered “stars” and
should be invested in more. In the upper left quadrant are
stars, which generate high income but also consume large
amounts of company cash. If a star can remain a market
leader, it eventually becomes a cash cow when the market's
overall growth rate declines.
QUESTION MARK
Questionable opportunities are those in high growth rate
markets but in which the company does not maintain a large
market share. Question marks are in the upper right portion of
the grid. They typically grow fast but consume large amounts
of company resources. Products in this quadrant should be
analysed frequently and closely to see if they are worth
maintaining.
EXAMPLE COCA COLA
QUESTION MARK
Fanta, a Coca-Cola product, is one such example where the business units
can be seen as a question mark. As the brand has not been able to gain
widespread popularity similar to Coke. Therefore, the brand is losing its
popularity. However, in some areas, it has been able to obtain a generous
sales volume.
CASH COW
Coca-Cola is one such example of Cash Cows. This product is sold across
200 countries in a mature beverage industry. The bottling partners in
different regions help in making the finished beverages available to the
market. This is how the organization is earning a significant amount of
revenues from its finished products. In a mature industry, it is advisable for
a company to keep the sales volume high as the business unit is
comparatively a good source to generate revenue.
STARS
The bottled water Kinley, a Coca-Cola product, is one such example of
Stars. This example is suitable here because the mineral water industry is
still viewed as a gradually growing segment on an international scale. The
rising population would require more bottled water to fulfill the needs of
the people. Due to the rising need for bottled water, the growth
opportunities for this business product in the industry has increased. Even
though Kinley faces competition from other competitors. Nevertheless, it is
essential for the management to understand that the bottled water brands
will remain a source of significant sales in future.
DOGS
Diet coke, a Coca-Cola product, is on such example of Dogs. It was
launched with the motive to offer consumers relatively healthier beverage
option in terms of calories consumed. However, the brand has not been
able to fetch consumers’ interest, which led to declined sales of this
business unit.
EXAMPLE 2 PHILIPS
CASH COW
The cash cows in the BCG Matrix are the products that have been on the market for some
time. They have ended up in the so-called maturity stage of the product lifecycle. A product
that can be classified as a cash cow in the BCG Matrix generally has a high market share, a
reasonable margin, and limited growth or a slight decrease. The costs are low. The
production line is largely recouped, and there is a limited investment in marketing. With cash
cows it is important that you as a company optimize the profit. So go see how you can, for
example, optimize processes and thus reduce costs. An example of a product that can be
classified as a ‘Cash Cow’ is the Philips energy-saving lamp.
STAR
The stars in the BCG Matrix are products at the start of the product lifecycle. The growth
and market share are high. Because the product is at the start of the product lifecycle, the
margins are usually also high. A lot is being invested in marketing. It is important for a
company to have stars. Here you can earn big money. To get stars, for example, a company
must invest in product development. If you have a star as a company, the strategy for this
product must be aimed at gaining as much market share as possible. An example of a
product that can be classified as 'Star' in the BCG Matrix is the LED lamp from Philips.
DOGS
The dogs in the BCG Matrix are products at the end of the product lifecycle, or products that
have had to compete against the competition. The margins are low, the market share is low
and the market barely grows or even shrinks. The company will no longer invest in
marketing. Many companies will choose not to produce the product at all. An example that
can be considered as a ‘Dog’ in the BCG Matrix is the plasma TV from Philips.
QUESTION MARK
The question marks in the BCG Matrix are the products of which the future is not entirely
certain. The market growth is high, but the market share low. The company must make the
choice: invest in marketing, and try to make the product a 'Star', or let the product flow down
to become a ‘Dog’, or in other words stop investing and even stop the product in the future.
The strategy for products that have been designated as a question mark must either be
focused on growth (to turn the product into a star) or on cost savings (to turn the product into
a cash cow). An example that can be considered as a ‘Question mark’ in the BCG Matrix is
the tablet from Philips. The market is growing very fast, but it takes a fortune in marketing to
gain a large market share in this. The question mark is sometimes referred to as 'problem
child' in other explanations about the BCG matrix.