Business and Management Formative

Business and management
Formative
Cash Cow at the Dairy
Q1. Classify each of these products according to the Boston Matrix. Justify your classification
Answer
Boston Matrix is a tool that categorizes different products with classification of market growth and
market share.
(Market Share)
High Low
Stars Question marks High (Market

Cash Cows Dog Low Growth)
There are four main products which are organized into business units of Farm Gate Dairy. The four
products are Gold Seal Milk, Lo fat Yogurt, Churn Butter and Hi Energy spread.
Gold Seal product is the Oldest established product of Farm Gate Dairy and has a high market share as
evident from the qualitative data present in the graph. Furthermore, as stated that Gold Seal Milk is in a
mature market where sales have little or no growth. Consequently, we can conclude that Gold seal Milk
can be categorized as Cash Cows according to Boston Matrix as they have a High market share and a low
Market Growth.
Lo Fat yoghurts is a recently developed product by Farm Gate Dairy which had captured the public’s
imagination but needs to sustain consumer interest. As, also stated that Lo Fat yoghurts which operates
in the health segment of the market is gradually becoming one of the fastest growing segments in
yogurt market. To conclude, Lo Fat yoghurts can be categorized as Question marks according to Boston
Matrix as they have a Low market share but high market growth.
Churn butter is a weak brand for Farm Gate diary as even through special offers and promotional
campaigns it had failed to create customer loyalty. It has a decreasing market share from 8% to 5% in a
low growing market as butter sales in general were suffering because of increasing health concerns. To
conclude, Churn Butter can be categorized as Dog as it has a low market growth and a low market share
in the market for butter.
Lastly, Hi Energy spread was recently introduced to the market 5 years ago and has managed to capture
a 31% market share. The market of healthy eating habits are increasing the market growth. To conclude,
Hi energy spread can be considered a star according to the Boston Matrix as it has a high market growth
and a high market share.
Q2. Discuss how this analysis assist managers when deciding on future marketing strategies.
Marketing strategies are various strategies adapted by business to achieve marketing objectives.
Marketing objectives are the goals of the marketing department to achieve overall objectives. In, this
case the overall objectives of the assist managers of Farm Gate Diary can be assisted by the analysis of
Boston Matrix.
For instance, Gold Seal Milk ,as stated above, is considered as a Cash Cow as it has a high market share
but is operating in a market with low growth. Therefore, Farm Gate diary should use a Harvest strategy
and reduce investments as it has already started by not promoting the brand for the last three years. As,
it is a low growth market and the Gold Seal Milk has a high market share, it will sell itself and therefore
farm gate diary would like to maximize and collect all the cash flow they can generate from this product.
Moreover, for Lo Fat yogurt, as stated it is categorized as question marks as it has a low market share
but is being operated in a market with high growth. As, the product has already caught the public’s
imagination, the assist managers should use a build strategy and invest more on the product to make it
a star by increasing it’s market share.
On the other hand, assist managers should use a divest strategy for Churn Butter as it has a low market
share and is also operated in a market with low growth. Farm Gate Dairy has already invested in
promotional campaigns and special offers and it didn’t work. The most advisable strategy for the
product would be divest and eliminate the product.
Lastly, HI Energy Spread, as stated above is categorized as Stars with a high market share and also being
operated in a market with high potential for growth. As, there are new brands who are trying to capture
market share, assist managers should use the build strategy. As, the market being a fast growing market
can become a opportunity for the business to capture a larger market share. If the business uses the
strategy Hold, as the market being growing fast would give other emerging brands opportunity to
capture a larger market share.

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Business and management

Cash Cow at the Dairy

Stars Question marks High (Market

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