PRINCIPLES OF MARKETING (MGT301)

Solution Assignment # 01
Analysis of product/business portfolio of GOURMET by using
BCG Matrix:
High

Question Mark
OR Problem

Market Growth Rate

Star

Child
Water

Ice-cream

Juices

Bakery
CSD (gourmet cola)

Cash Cow

Dog

Milk

Low
High

Relative Market Share

Low

Arguments
Product: BAKERY
Position: STAR
Reason for placing product in above mentioned quadrant:
a. Gourmet is leading in the market in bakery products with more than 400 varieties.
b. In the bakery products, it has find a dominance which is unparalleled by any
other brand in the market.
c. It has freshness, uniqueness and cleanliness with superior quality.
d. Right now the market of bakery products is growing and attracting more
investors.
e. As Gourmet is leading in the market so based on aforementioned observation, it is
rated in Star quadrant.

Product: ICE-CREAM
Position: STAR
Reason for placing product in above mentioned quadrant:
a. Pakistan is a warm country where summer season is longer than winter. Thus it is
not surprising to note that ice-cream has become the first preference of children,
women and men. We must not overlook the fact that the population of Pakistan is
growing fast.
b. Due to aforementioned reason, the market growth of ice-cream is observed high
and attracting more investors.
c. The leading brands in Ice-creams are charging high prices whereas Gourmet ice
cream price is very economical.
d. Not only price, but the quality of the ice cream is also parallel to any leading
brand.
e. Because of Quality at economical price, Gourmet captures a considerable share in
the market of ice-cream and now number of repeat purchase is high. The rate of
increase among the new purchasers is also growing at a considerable pace, Thus it
is rated in Star quadrant.
f. Now Gourmet has superior quality brands with best quality and impressive
representation; superior in price and taste; available in larger variety.

Product: WATER
Position: QUESTION MARK
Reason for placing product in above mentioned quadrant:
a. Non-availability of pure water for drinking is a leading problem in Pakistan. To
prevent the diseases caused by contaminated water, people are now shifting
towards filtered and mineral water. The market of filtered and mineral water is
growing at a very fast pace. We must not overlook the fact that the population of
Pakistan is growing fast and load shedding has increased the use of liquid.
b. To hunt the opportunity, Gourmet has also launched its mineral water in bottles
for office and household consumption along with convenient small bottles.
c. The sales has really trigged since its launch.
d. Gourmet is still unable to gather a substantial share in this growing market
because the leading brands have already captured a big share of the markets.
e. It is yet to grow from its pre launch position on account of the huge competition it
faces from Nestle, the market leader in this field.
f. Based on the aforementioned observations, it is rated in Question mark quadrant.

Product: CSD (GOURMET COLA)

Position: QUESTION MARK
Reason for placing product in above mentioned quadrant:
a. Pakistan is a warm country where summer season is longer than winter. Cold
drinks have become the first preference of children, women and men not only in
routine days but also in functions. We must not overlook the fact that the
population of Pakistan is growing fast and load shedding has increased the use of
liquid.
b. Thus the market growth of cold drink is high and already captured by leading
brands from CocaCola Beverages Pakistan Ltd and PepsiCo.
c. Gourmet launched its cold drink with a promise of good quality at economical
price.
d. The market is already captured by the giants of CocaCola Beverages Pakistan Ltd
and PepsiCo thus Gourmet is facing serious difficulty in grabbing a consierbale
pie of market share.
e. It is also observed that the promotional drive of Gourmet Cola has not taken
seriously.
f. The main chunk of advertisement is seasonal.
g. It has gained high market growth due to its low price, packaging but still it has not
acquired better market share.
h. Based on aforementioned observations, it is rated in question mark quadrant.

Product: MILK
Position: CASH COW
Reason for placing product in above mentioned quadrant:
a. Farming and cattle industry is a leading industry in Pakistan as Pakistan is an
agriculturalist country. In addition to that, almost at every celebration sweet
dishes are made of milk. Thus milk market is always considered as big growing
market. We must not overlook the fact that the population of Pakistan is growing
fast.
b. Gourmet has rightly captured this demand in growing market and launched its
Pasteurized milk.
c. Now it is considered as one of the leading products since its inception in the
market with rapid increase in its demand.
d. The sale of milk is increasing on a continuous basis.
e. Its different variants have kept competitors at bay and it will soon find a place
easily at almost every general or provisional store in the market.
f. Gourmet has now snatched a considerable pie of market share of milk.
g. Based on aforementioned reasons, the milk is rated in Cash Cow quadrant

Product: JUICES
Position: Question Mark
Reason for placing product in above mentioned quadrant:
a. Pakistan is a warm country where summer season is longer than winter. Juices
have become the first preference of children, women and men in routine days but
also in functions. We must not overlook the fact that the population of Pakistan is
growing fast and load shedding has increased the use of liquid.
b. The awareness among people regarding carbonated water has shift the demand
towards juices.
c. Thus the market growth of juice is high and already captured by leading brands.
d. One must not forget that juice market is also captured by fresh juices shops.
e. Gourmet Juice has tried to capture the opportunity but due to lack of core quality
the product was not warmly welcomed by people.
f. The Promotions and advertisement is disappointed.
g. This Gourmet failed to capture a good market share so far in the market.
h. Gourmet requires rebuilding the image. Based on aforementioned fact it is rated
in question mark

Special note: to measure the market share, those markets are considered for analysis
where Gourmet is present and functioning along with its competitors.
Its a sample solution; students observation may vary but requires strong logics and
arguments.

HELPING NOTES:
Market growth means increase or decrease in product sales of a company gradually.
Companies usually consider this factor during evaluation of a particular product
performance in a particular market.

Market share means the increase or decrease in percentage of a companys business

volume in the given or relative market in relation to its competitor.

Name of SBUs, description and uses:

Stars are high-growth, high-share businesses or products. Company has long run
opportunities for growth and profitability.
Cash Cows are low-growth, high-share businesses or products. Cash generation is high.
Question Marks are low-share business units in high-growth. Cash need high but cash
generation is low.
Dogs are low-growth, low-share businesses and products. No potential for cash
generation.