Datta Meghe Institute of
Management Studies
Product & Brand Management
Unit 1
Lecture 3
Product portfolio decisions.
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Datta Meghe Institute of
Management Studies
Syllabus
• Unit 1 - product portfolio decisions
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Datta Meghe Institute of
Management Studies
Learning objectives
What are product portfolio decisions
Datta Meghe Institute of
Management Studies
Product Portfolio
Product portfolio is the setof different products that an organization produces, ideally balanced so that some products are mature, some are still in their growth stage while others are waiting to be introduced.
Datta Meghe Institute of
Management Studies
Product Portfolio
Portfolio Management has become one of the hot topics in industry over the last 3-5years
Today emphasis comes primarily assigned to “new product development’’ & “product innovation” over the last few years because of increasing competitive pressures inmost industries
Datta Meghe Institute of
Management Studies
Product Portfolio
Portfolio Concept : The portfolio of any unit or an entire company
should be viewed in four quadrant model, which depicts a normal progression of typical portfolio stages in anti clockwise order starting from upper left corner
Datta Meghe Institute of
Management Studies
Product Portfolio
•UPPER LEFT QUADRANT (I)
•Long term product planning
•Example : Maruti - Capricorn
•UPPER RIGHT QUADRANT (IV)
• Products either in decline or exit phase of life cycle
•Example : Maruti – 800
•LOWER LEFT QUADRANT (II)
•New products in pipeline
•Example : Maruti – Gemini, Taurus
•LOWER RIGHT QUADRANT (III)
•Products already introduced and announced
•Example : Maruti – SX4, Swift, Swift-Dzire, Ritz, A-star, Zen-Estilo, Wagon-R, Alto
Datta Meghe Institute of
Management Studies
Product Portfolio
1. Upper Left Quadrant :Represents products in long term planning.
These products and projects are in “vision” state, 3-5 years out in time
They are being projected against the corporate strategy, goals and objectives, customer needs, market research exercises, competitors behaviors etc.
Datta Meghe Institute of
Management Studies
Product Portfolio
2. Lower Left Quadrant :Covers new product development projects which
are in pipeline This is the portfolio management quadrant
where most of the emphasis has been placed in recent years by academics and consultants as well as by most businesses which have more recently just begun implementing portfolio management disciplines
Datta Meghe Institute of
Management Studies
Product Portfolio
3. Lower Right Quadrant :Represent all products already announced and
introduced. These are products undergoing active life cycle management in order to optimize the revenues and margins
The individual life cycle phases of products in this quadrant are typically called growth and maturity
Datta Meghe Institute of
Management Studies
Product Portfolio
The object of portfolio management activities in this quadrant is to optimize the revenues and profits of all products such that maximum amount of funding for new product projects can be continually made available to the project managers and developers of new products
Datta Meghe Institute of
Management Studies
Product Portfolio
4. Upper Right Quadrant :Products in this quadrant are in either the
decline or exit phase of their life cyclesWhile they may still be revenue and margin
producing until final exit from market place, their returns are usually are considerably lower at this stage than those products still in previous quadrant
Datta Meghe Institute of
Management Studies
Product Portfolio
Logic for portfolio approach :Portfolio management has been studied,
documented and discussed for decades. Some companies have done an excellent job of establishing and maintaining core competencies in this key business function
Datta Meghe Institute of
Management Studies
Product Portfolio
There are five activities the product manager should perform relative to evaluating the product portfolio
i). Maintain a Database on existing products :
The product managers first job related to evaluating the product portfolio is to ensure that product related information is gathered which is useful for analysis and decision making
Datta Meghe Institute of
Management Studies
Product Portfolio
This is called product fact book , where all information is centrally located. The fact book can be in the form of three-ring binder, a manual filing system, or an electronic database
Datta Meghe Institute of
Management Studies
Product Portfolio
ii) Evaluate product performance :Aspects to evaluate product performance
include : sales through customer segment, channel of distribution, seasonable fluctuations in demand, the awareness and preferences level for the product , rate of repeat purchases and the planned-to-actual performance
Datta Meghe Institute of
Management Studies
Product Portfolio
iii) Add value to existing products:Both the competitive matrix and profile
approaches just described compare the product against its competitors along established factors
The typical objective is to improve attributes that are competitively weak. If this also results in price reduction, it can more beneficial from the customers point of view
Product Portfolio iv) Increase Market Penetration:Another tactic the product manager could use
is to boost sale volume by increasing the number of users and the usage rate per user
The number of users can be increased by making favorable changes in products by studying customers needs and competitors products, analyzing new customer segments and converting non users in to users
Datta Meghe Institute of
Management Studies
Product PortfolioTo increase the number of users, a product
manager must collect three types of information : (i) Why customers buy competitors products (ii) What if anything could convince non users to become users of the product (iii) Which market segment is attractive and accessible?
Datta Meghe Institute of
Management Studies
Product Portfolio
v) Evaluate the product line:Particularly when the line is comprised of fast
moving consumer goods (FMCG), first the data needs to be maintained on each item in the line
Try to determine whether customers can substitute a filler product if core product is out of stock or they opt to buy a competitive product
Datta Meghe Institute of
Management Studies
Product Portfolio
Add the value to the product line by (a) adding products that enhance the competitive positioning and increase brand equity or (b) deleting products that are not important to the target market
Finally increase market penetration by generating more usage through a carefully planned marketing communicating strategy
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Datta Meghe Institute of
Management Studies
Summary
Product portfolio is the set of different products that an organization produces, ideally balanced so that some products are mature, some are still in their growth stage while others are waiting to be introduced. The portfolio of any unit or an entire company should be viewed in four quadrant model, which depicts a normal progression of typical portfolio stages in anti clockwise order starting from upper left corner
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Datta Meghe Institute of
Management Studies
Assignment
• Explain product portfolio in HUL , explain in Details about its Product portfolios?
• LAQS and SAQS• Explain Product Portfolio• Explain four quadrants of product Portfolio• Explain Market penetration• product line
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Datta Meghe Institute of
Management Studies
Reference
• Marketing Management – Kotler, Keller, Koshy, Jha
• Principles of Marketing – Kotler, Armstrong, Agnihotri, Haque
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