Business strategy assignment case study 2011 - Sample Essay
The above planning technique is called a Boston Matrix and it is used to analyse a company or their products based on their market share and whether that is growing or stagnating, or just needs more investment. When a new product is launched it is always a ‘Question Mark’ as it has a small market share and needs time and investment to grow; its future is uncertain as it needs the benefit of time and investment for it to grow and it may fail as many new products do. A Rising Star has a high share of a growing market, but is likely to face fierce competition because of the growing market so it still needs a lot of marketing.
A Cash cow has high share in a low growth market; it is a stable product that brings continuous income which can be used to finance the new ‘question mark’ products and the Rising Stars. A Dog however has low share and a declining market, perhaps it is an outdated product that needs to be revived, and maybe it is only kept to complete a line range of products or to satisfy established loyal customers who may still need the parts or customer service. When Kellogg’s decided to launch the FRUIT WINDER, which box in the above matrix did it fall into?
Using other information apart from the case study explain and justify your answer. When Kellogg’s decided to launch the Fruit Winder in 2001 for the UK market, it was their first non-cereal based product; therefore for Kellogg’s it was a completely new product for a completely new market. It required a lot of very clever marketing to appeal to children, as it was marketed as a cross between a fruit and a toy in fact. The objectives for Kellogg were for the Fruit winder to become a Top 10 kid’s confectionery snack, to generate sales of over ?
15 million and to be profitable within two years of the launch. To this end they developed an interactive online campaign where they developed characters for all the Fruit winders, with names like ‘Sorbabe’, a female Strawberry who loves to dance to music as a musical and ‘D. J. Booster’ , a male Blackcurrant who is intelligent with his gadgets and whatnots. The Fruit winders come in various flavours and Kellogg’s even developed a secret language for them that only kids could understand.
This was followed by a TV advertising campaign but the online campaign had already had huge success, this just built on that success. It appears that Kellogg’s was more than successful in achieving their objectives to become a top selling kids snacks, despite some bad press from parents groups who claimed there was very little real fruit or goodness in the Fruit winders. Fruit winders are now an established popular brand with its target market of children ages 6 to 12. Looking at the Boston Matrix I believe that the Fruit Winder is in fact a ‘Question Mark’ product for the following reasons.
Fruit winders were a new product for a new market, but needed considerable investment to grow and raise awareness. Although there is a similar product in the USA called Fruit Roll ups marketed by a Kellogg’s competitor, Fruit winders were only sold in the UK market therefore profits are somewhat limited by this fact. Question marks are products that are growing rapidly and consume large amounts of cash, as we can assume the marketing campaigns for these types of product do, as they need to be kept in the target markets awareness.
It has the potential to gain market share and become a star but needs continual investment to do so, perhaps at the expense of other products. If it is not a Star, neither is it a Cash Cow, as it has not yet reached the maturation stage, neither is it a Dog, as it is not in a stage of decline either. This is why I conclude that Fruit Winder is a Question Mark, and therefore need to be analysed continually in order to determine whether it is worth the investment required to grow market share and become a Star or a Cash Cow.