Marketing- Product Portfolios

Question 1

What is a product portfolio?

Answer 1

This is the range of products a business sells, usually under the same brand name. However the business could decide to move into very different product ranges
For example Unilever makes ice cream and soap powder under different brand names

Question 2

Each of the products in portfolio will be at a different stage in its life cycle, what does this allow the business to do?

Answer 2

Spread its investments across a range of products, thereby reducing the level of risk
Maintain a sustainable profit level and perhaps increase profits from selling different products
The different products with a portfolio can perform a different function e.g. Cash cows, star, problem child and dogs (Boston Matrix diagram)

Question 3

What does the product portfolio show?

Answer 3

The product life cycle
Money spent
Money gained

Question 4

What are the advantages of selling a range of products? (Name 6)

Answer 4

There are increased profits from selling a variety of different products
Brand awareness will increase
It will be easier to launch new products
Allows the business to spread the risk as they are not relying on a single product
The business can more easily cope with seasonal fluctuations
New products can replace those at the end of the product life cycle

Question 5

What are the disadvantages of selling a range of products? (Name 3)

Answer 5

Advertising costs can be higher to ensure customers know about all the products
Research and development costs can be high to maintain a variety of new products
If one product under the brand name has a problem it can affect the whole portfolio