Mastering the BCG Matrix of Strategic Marketing

The widely used BCG matrix helps a business determine its profitability, evaluate the position of their brand and most importantly evaluate the potential of products based on the attractiveness in the industry.

It gets its name from the creator of the matrix, Boston Consulting Group (BCG), but its also known as the Growth-Share Matrix.

The horizontal and vertical axis represent the Market Share and Market Growth respectively. The graph divided into 4 quadrants, represented by illustrations namely- Dog, Cash Cow, Star and Question marks, each standing for a certain degree of profitability.

Analyzing Each Symbol:

DOG

Low Market Share and Low Market Growth

These are the black-sheep of the business and careful consideration should go into whether the business should further invest in these products or not.

CASH COW

High Market Share and Low Market Growth

These are the products that enjoy maximum goodwill in the market. Every brand strives to get hold of such products.

QUESTION MARKS

Low Market Share and High Market Growth

These are the products that don’t perform well due to certain underlying problems. If these problems are resolved, the question marks could become Stars. But, if these problems worsen the product could transform into a Dog.

STARS

High Market Share and High Market Growth

These products enjoy the limelight or the monopolistic position in the market. The products are very profitable for the company as the consumers thoroughly enjoy them.

Understanding the BCG Model Through an Example

Let’s consider the example of a leading FMCG brand, Amul. The company has been in the FMCG market since a long time and its effective branding and marketing strategies make it an unmatched business set-up. But this doesn’t mean then don’t have any “Dogs” or “Question marks”.  The following examples help you better understand the products and the categories they fall in.

Cash Cow - Amul Milk and Amul Butter enjoy this status contributing to the goodwill and recognition of the brand. 

Dog - Amul Pizza and Amul Cake Mix are prime examples of this category. They don’t enjoy as much recognition because they face competition from brands that primarily specialize in them.

Question Marks - Amul Lassi falls under this category. The market growth prospect of this brand is high but Amul brand doesn’t enjoy exclusivity of the same, possibly due to problems like high price for less quantity. If the problem is resolved, the company may enjoy its benefits.

Stars - Amul Ice- Cream and Amul Ghee enjoy a monopolistic position in the market because the customers prefer it to any other brand.

 

Written By - Tushna Choksey