What is a product portfolio?
The complete range of products produced by a business, including product lines and individual products.
Also called product mix.
What is the goal of a product portfolio management strategy?
Creating a portfolio that covers a variety of customer needs without any overlap or duplication (cannibalization).
Briefly explain product line depth and product line breadth. Give examples.
Product line depth: number of items in a given product line, satisfying customer sub-segments with different tastes and price sensitivities.
Ex.: within the loreal consumer category, Maybelline and Garnier address different customer segments
Product mix breadth: variety and number of product lines offered by a firm (product categories).
Ex. fashion brands: might separate btw. women, men, and children
Ex. Loreal: L’Oréal luxe, consumer products, active cosmetics, professional products
What is the fastest way to build up the portfolio size?
Through acquisition
What is a common problem in portfolios?
Often portfolios are inefficient and too complex. This is the case when portfolios got too large and include brands that do not contribute to revenue or growth and makeup only a small amount of profit. At the same time, they take up a disproportionate amount of resources.
Which two forces have to be balanced when managing a product portfolio?
Market coverage/synergies vs. overlap/cannibalization
What aspect should be consulted when trying to understand the current state of a portfolio?
Visualization
Financial Contribution
Strategic Roles
Describe the BCG matrix and how it can be used to manage portfolios.
What is a focus or power brand? Give an example.
Power brands bring strong financial results for the company, have future momentum, and strong consumer following
Ex.: Ab in Bev portfolio with over 200 brands but marketing support focused on three power brands)
Name all five support brands which complement the power brand.
Fighter Brand: low-value offering
Niche Brand: brand targeted at a very narrowly defined segment
Past Champion: past power brands, maintain sales levels without the need for significant support
Silver Bullet: help establish/maintain the overall brand image, mystique, and credibility, by adding important associations
Entry Point: affordably priced product to serve as entry point to the brand: trade up to more expensive brands in the portfolio
What is an extension in the context of line filling (portfolio change)?
A brand extension is when a firm uses an established brand name to introduce a new product.
Name and briefly describe the four categories on extensions.
Line extension (portfolio depth): transferring an existing brand name to a new product within the same or closely related product line, less risky
Category extensions (portfolio breadth): transferring a brand name to a new product or service outside of the original product category, riskier
Customer extension: using existing brand on new products or services sold to a different customer segment
Channel extension: using existing brand to expand to a different distribution channel
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