UNIVERSITY OF NAIROBI
SCHOOL OF BUSINESS STUDIES - BANDARI COMPUS
KIBWANA .K. MATAKA
REG NO: D61/70919/2008
MASTERS IN BUSINESS ADMINISTRATION
A. IDENTIFY A FIRM OPERATING IN KENYA AND ANALYSE ITS PRODUCT MIX USING BOSTON CONSULTING GROUP MATRIX (BCG MATRIX)
B. FOR THE SAME FIRM DISCUSS HOW CHANGES IN THE MARKETING ENVIRONMENTAL FORCES IN THE LAST THREE YEARS HAS AFFECTED MARKETING ACTIVITIES.
C. IDENTIFY LAWS/ACTS IN KENYA AFFECTING MARKETING. WHAT IS THE PURPOSE OF LAW/ACTS.
A. Identify a firm operating in Kenya and analyse its product mix using Boston Consulting Group Matrix (BCG Matrix)
In order for us to discuss the identified firm operating in Kenya and analyse its product mix using Boston Consulting Group Matrix (BCG Matrix) its important to discuss Boston Consulting Group as concepts then we apply and analyse the company identified.
Boston Consulting Group Matrix which is also referred as BCG Matrix, Boston matrix, Boston Box, Boston Matrix or Boston Consulting Group analysis is a chart that has been created by Bruce Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business unit or product lines. Among its uses this model helps organizations to allocate resources and is used as analytical tool in branding marketing, product management, strategic management and portfolio analysis.
For the purpose of our discussion we will analyze the East African Breweries Ltd (EABL) which has an annual turnover of over 30 billion and has the largest share of beer industry in the region. The group employs more than 1000 people across East Africa. We intend to skew our discussion on the Kenyan perspective of the company.
Generally, Boston Consulting Group matrix considers two criteria the native market share and marketing growth rate.
Categorically it separates products into four areas namely:- * Stars
* Question Marks
* Cash Cows
Under question marks products we argue that Alvaro which is a non alcoholic malt drink qualifies to be considered into this category. These products which are also referred as problem child have high growth rates but low relative market share. In the first six months in the market the company had spent over 600,000 to promote it. Thus they are known to be growing rapidly and thus consumes large amount of cash. Alvaro has shown the potential to gain market share and become a star and eventually a cash cow when the market slows. However if the question mark does not succeed in becoming a market leader it will degenerate into a dog when the market growth declines. Question marks must be analysed carefully to determine the direction in which they are moving toward to.
In November 2004 EABL introduced Senator keg brand into the market. The brand has high performance since it is providing affordable and high quantity alternatives for illicit brews. It targets the low income earners. This brand qualifies to be a star. Senator Keg is probably relatively new product in the growth phase because they have high market shares, however they may be generating sufficient growth profits to cover their investment needs. By 2008 the product had passed the mark of 3500. This products will become cash cows of the later years but it currently unlikely to be generating a high level of revenue due to the high level of investment required to expand the product. Usually the predominant strategy is to grow then to the next stage the “cash cow” where most profits are made. To achieve this company is using the ‘Tuko Mtaani’ na senator keg promotion as the main marketing campaign. Cash Cows
Tusker is the main brand for EABL with over 30% of the Kenyan beer market selling more than 700,000hectolitres per year. This brand was launched in 1923. Tusker beer has high market share in a show growing industry. This product typically generate cash in excess of...