There are probably even more aspects that need to be considered in a particular use of the BCG model. About the BCG matrix in the seed industry: Question marks, which seem to be performing well, become stars while cash cows are products that give the most money. Dogs waste money. Varieties in question marks: try to promote them and hope that their adoption will be successful. Price Influence demand and affects profits directly. Factors affecting price of seed: 1. Demand 2. Availability 3. Competition- avoid price wars with established firms 4. Cost of producing the seed will affect the price 5.Whether the seed is a hybrid or not 6. Price skimming- can charge any price and still make profit because of high demande.g. when GLS tolerant varieties were first introduced 7. Price of crop produce- govt can fix prices 8. The market- where are you selling the seed- in Zim? Moza, rural community, S. Africa? More expensive in S. Africa 9. Subsidies Pricing strategies Price to sell a certain quantity e.g. to get rid of stoch=k which is about to be withdrawn Price skimming to maximise profit in short term where varieties change regularly Price to achieve market share- to penetrate the market Cost plus pricing e.g add 5 % to what ever price it is Place How the product reaches the customer i.e distribution. Distribution is either direct or indirect. Direct distribution is when sales are made directly to the farmers. Indirect is the use of intermediaries. Direct distribution channels- sales reps take direct orders from farmers and the seed is supplied from company warehouses Adv- 1. supplier has direct contact with the farmer 2. There is high level of farmer support 3. Direct control over the quality of seed. Convenient for LSCFs Disadv – Too expensive with many small farmers Needs speedy processing of orders
There are probably even more aspects that need to be considered in a particular use of the BCG model. About the BCG matrix in the seed industry: Question marks, which seem to be performing well, become stars while cash cows are products that give the most money. Dogs waste money. Varieties in question marks: try to promote them and hope that their adoption will be successful. Price Influence demand and affects profits directly. Factors affecting price of seed: 1. Demand 2. Availability 3. Competition- avoid price wars with established firms 4. Cost of producing the seed will affect the price 5.Whether the seed is a hybrid or not 6. Price skimming- can charge any price and still make profit because of high demande.g. when GLS tolerant varieties were first introduced 7. Price of crop produce- govt can fix prices 8. The market- where are you selling the seed- in Zim? Moza, rural community, S. Africa? More expensive in S. Africa 9. Subsidies Pricing strategies Price to sell a certain quantity e.g. to get rid of stoch=k which is about to be withdrawn Price skimming to maximise profit in short term where varieties change regularly Price to achieve market share- to penetrate the market Cost plus pricing e.g add 5 % to what ever price it is Place How the product reaches the customer i.e distribution. Distribution is either direct or indirect. Direct distribution is when sales are made directly to the farmers. Indirect is the use of intermediaries. Direct distribution channels- sales reps take direct orders from farmers and the seed is supplied from company warehouses Adv- 1. supplier has direct contact with the farmer 2. There is high level of farmer support 3. Direct control over the quality of seed. Convenient for LSCFs Disadv – Too expensive with many small farmers Needs speedy processing of orders