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How Stars, Question Marks, Dogs, and Cows Are All Business-Related

My introductory marketing professor was an interesting guy. He originally taught the radiography (X-ray Technology) classes at my college and then he decided to tackle something new and focused on his other major (Business Administration) and began teaching business classes. He told us his history on the first day of class when he passed out the syllabus, and I remember thinking: “is it too late to drop this class?” I’m so thankful I didn’t because this professor was a major reason behind my major in marketing. He made it fun, interesting and most importantly: easy to want to study and succeed.

The point of this backstory is to explain my professor’s quirky sense of humor. One of the topics we learned about stuck with me even today, and that’s because of his humor. He explained that the Boston Consulting Group (BCG) created the BCG Portfolio Matrix in 1966 to determine each Strategic Business Unit’s (SBU) own rate of return on investment, growth potential, and level of risk. After he explained each quadrant, we were convinced he had made up the titles. However, if you ever thought that business people didn’t have a sense of humor, just take a gander at the titles they’ve given the categories: Stars, Question Marks/Problem Children, Dogs, and Cash Cows.

BCG Matrix

BCG Matrix

Now, if you’re confused as to what each category means, don’t you fret! The titles actually make complete sense and will help you and your company to determine which products are doing great and which ones are struggling.

  • Star: This is a fast-growing market leader who yields large profits but needs a lot of cash to finance their growth. If companies can capture new consumers in the market, these products will be successful; however, if they aren’t able to attract new consumers then they’re very risky to keep. These products are just like a child actor that rises up to fame quickly and gets accustomed to a certain lifestyle, but once the studios stop calling they can’t maintain their happiness levels.
  • Question Mark/Problem Child: No, this is not used because of the movie Problem Child starring John Ritter. These products show such promise because of their rapid growth, but because of their poor profit margins they end up leaving more questions than actually answering them. As teachers know, there’s always that one student who’s really intelligent but also a handful. They aren’t being challenged enough and therefore tend to act out and won’t follow directions.
  • Dog: “Let a sleeping dog lie” is a fine and dandy expression, but doing so isn’t going to do jack-squat for your company. These products have low-growth potential and own a very small market share. Your only options are to either harvest (increase short-term cash return without concern for the long-run impact, basically grab your money and run) or divest (completely scratch this idea and move on). It seems cruel to use a dog as a way to describe a kid, but for the sake of learning here it goes. These kids are the ones that just sit there during recess instead of running around playing because…well, they’re lazy.
  • Cash Cow: Are you picturing a cow standing in a field munching on grass waiting to be milked? If not, you should, because this is exactly what this category does. They generate more cash than they need to maintain the market share. Revenue from cash cows is used to fund Stars and fix Question Marks. I think my description does justice to describe what a cash cow does, plus I can’t think of a kid that can just sit there and make money (if you can, please comment!).

Despite my initial worrying in that introductory marketing class, this knowledge has stuck with me through the years, even into post-graduation. I hope this profile matrix helps your company out with your successful or struggling products!

What are your thoughts on the BCG Matrix? Do you have any questions about the categories?



Amy Swanson

Amy is one of Quality Logo Products’ content developers and social media coordinators. She is a self-professed newspaper nerd and thoroughly enjoys reading business and financial news and having impromptu discussions about it. Oh yeah, she’s “one of those” people! A true Midwestern girl by nature, she loves riding her bike, photography, and the Chicago Cubs. You can also connect with Amy on

Comments

  1. Jill Tooley

    This is completely new to me! I love your little rundowns at the end; they’ve really helped me understand how this works.

    Can you think of any real-life product examples that fit into these different categories? When I read the “Star” description, all I could think of was MySpace when it was in all of its glory. It surged to popularity but didn’t quite know how to attract more users or innovate the user experience…so it became the virtual-cobweb ridden wasteland that it is today! Would the HP Touchpad be a good example of a “Question Mark/Problem Child,” do you think?

    Interesting stuff, Amy! :)

    • amy

      Thanks so much Jill :)

      Your MySpace example is spot on! Once other companies jumped on the social network wagon, MySpace could’ve been a contender but since they didn’t attract any new users they fell by the wayside.

      Most businesses start out as question marks since they take a lot of cash to get started. An example would be Apple’s Mac Book Air or Coco-Cola’s FUZE drinks. They need a lot of research, development, and marketing to get off the ground. I would agree that HP’s TouchPad would also be a great example. They needed to research the market, develop the technology, (I’m sure Apple isn’t sharing that) and then advertise the heck outta it. A lot of money is going out, without much coming in. I’m sure that’s why HP decided to divest it and save their bottom lines.

  2. Joseph Giorgi

    Very interesting post, Amy! The BCG Portfolio Matrix seems logical enough, but I probably would’ve had a tough time following it without your anecdotes and comparisons. Nicely done!

    Suddenly I miss John Ritter.

    • amy

      I miss John Ritter too! I can’t believe he’s been gone now for a couple years.

      I’m glad my crazy anecdotes and comparisons helped, I was hoping they’d clear things up :)

  3. Amanda

    Nice post Amy! I find these marketing blogs very interesting! I also liked how you gave us examples to relate to–makes it much easier to understand.

    I can agree with the Myspace and HP Touchpad comparisons–those also helped it make a lot of sense! =)

    • amy

      Thanks Amanda :) Some marketing topics are pretty “out there” and difficult to explain, so I’m glad the examples helped. I always do better with real-world examples instead of a stuffy book definition.

  4. Amanda

    I wonder if bananas at Walmart could be considered a Cash Cow. Supposedly, that’s their #1 seller! And that doesn’t take much advertising if you ask me–pretty much everyone loves and buys bananas!

    • amy

      I would agree with you on the bananas at Walmart. Consumers love bananas and will buy them with or without advertising. It makes sense that they’d be their most popular seller, but it’s still funny to think that out of the thousands of products Walmart sells the most bananas hahahaha

  5. haley

    can you give me examples of dog products?

    • amy

      Hey Haley! Thanks so much for stopping by :)

      I’m not sure if you mean dog products from this post? If so, companies don’t keep them around for very long because they offer low-growth potential and don’t own much of the market share. The best example I can think of is a movie theater in a small town. The town isn’t growing so no new customers are coming in, and because of that they don’t get the newest movies so what customers there could be are driving to the city to see the latest flick. It won’t survive very long so it’s better to cut their losses and move on.

      If you meant dog promotional products, then check out Serenity’s post for some great ideas. Or, you can contact us directly for more information: info@qualitylogoproducts.com or (866) 312-5646. :)

      I hope this helps you out!

  6. Sissy

    Do you think Apple has any product that would be considered a dog?

    • Amy Swanson

      Hey there, Sissy!

      In all honesty, Apple is the exception to a lot of rules in regards to business I think. From their product offerings on their website I can’t really think of any product that has “low-growth potential and own a very small market share.” Sure, their keyboards, headphones, and speakers aren’t making them millions probably, but they’re still products and accessories that people need.

      It’s possible that their less popular iPods (iPod Nano, iPod Shuffle) may some day become obsolete when they become more expensive to produce than to sell them. However, without doing proper research on that claim I can’t say for sure.

      I’m sorry for giving such a wishy-washy response, but Apple is a difficult company to point out their product offering faults. Microsoft on the other hand, not nearly as hard ;)

      Thanks so much for stopping by, hope this helps a little bit!

    • zamu

      have u ever heard apple tv? :)

  7. Frank kasunga

    Thank you….AMY……u have helped alot….Appriciate that

  8. Mary

    Hi! Do u think that the XboxKinect could be considered as a dog? And if it is a dog, does it mean that it is a luxury good or does it fall under shopping goods? :)

  9. annie

    Hi Amy,
    I’m just preparing a marketing presentation for my business class about amazon. And I just couldn’t remember what my Prof said last week about the dog part of BCG Portfolio Market… so I ended up on your page. thx, so much :) you’re explanations are way better than what my Prof was chewing on for 3 hours….
    So thank you :D

    • amy

      Hey there, Annie! I’m so glad this blog was easy to understand, I had a few professors in college that talked circles about something but never truly explained it.

      Best of luck with your presentation, I hope you ace it!! :)

  10. Martin

    Hi Amy, thank you for a great example of the BCG Matrix, however, I do not agree with the get rid of the dog philosophy. Dog products such as Converse have had extensive surges over the past decades with the skateboard generation of the 80’s, the grunge scene in the 90’s and after Nike bought the logo in 2003. Converse has become a cow. Companies and teachers should never give up on the dog. They can end up paying off with a little confidence, attention, and belief that an ole dog is not a dead dog.

  11. Hans

    While interesting, I don’t agree with the dog philosophy. I was taught that some products can work using the dog.

    The best example would be luxury products – extremely high end things. For example, how many Rolls Royce are sold each year? Very few, I’d imagine. So low market share, check. How many additional people each year can buy one? Again, very few. Low growth potential, check.

    Still the Rolls Royce doesn’t seem about to die just yet.

  12. MANISH

    Hello Amy,
    The way in which you have explained BCG matrix is really wonderful especially when you related the SBUs with examples found in the normal life.

  13. mina

    thank you very much.this is the best illustration ever the example helps a lot . thanks

  14. Max

    Despite of having good revenue compared to other SBU’s, why does a SBU still stand in Question mark quarter???

  15. Noman Hafeez

    V. Nice

  16. Thomas Roque

    Do you have the growth share matrix for Coca Cola products?

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