Question

After extensive research to assess current trends, Penn determined that people were choosing to marry later. And then when couples did marry, they delayed having children. Also, people started working from home. This meant that people were more inclined to get pets. Their pets were their companions, and for couples who put off having children, they were treating their pets as their children. Additionally, as the careers of these people continued to grow, their discretionary income increased, and they were not spending this money on children yet. They also had time to spend with their pets since they had no children to care for or take places or help with education and activities. Based on this research, Penn decided to select a new market for their tennis balls. They chose pet owners and began marketing tennis balls to dogs. Penn became the first company to develop such dog toys. They changed the traditional tennis ball to a "natural felt fetch toy." They made the balls dye-free, changed the price from $2.50 for three old-fashioned tennis balls to $5.00 for two ball toys. Their first customer was PetsMart, Inc. who ordered 400 cases immediately. Question 2: (a). Was pet pampering a high or low growth industry? (b). Did Penn have a high or low market share of the dog toy market at the time of introducing their "natural felt fetch toy?" Why? (c). Which business type (Question Mark, Star, Cash Cow, or Dog) best describes Penn after introducing their dog toys to the market? Explain the type you selected based on your answers to (a) and (b).

Answer 1

(a) Pet pampering was a high growth industry because after the extensive research to assess current trends, people are have spending capacity but they are inclined to get pets and take care of their pets as their children.

(b) Penn have a high share of the dog toy market at the time of introducing their "natural felt fetch toy" because they were the first company in the market to develop such dog toys. This means that at the point of time of introduction of their "natural felt fetch toy", there was no other company marketing such type of dog toy in the market.

(c) Business type STAR describes Penn after introducing the dog toy to the market because they are the only producer of dog toys and they have higher market share. Moreover the industry has also a high growth prospects. Hence as per BCG matrix (Growth market share matrix), Star best describes the Penn.