Product in the Marketing Mix (Product Portfolio Analysis) Flashcards
Product portfolio
A range of products or brands provided by a business.
Product portfolio analysis
Analysing the existing product mix to help develop a balanced range of goods and services.
Product life cycle
The sales path of a product from its introduction onto the market to its eventual disappearance.
The stages of the product life cycle
Development
Introduction
Growth
Maturity
Decline
Development
The product is being researched and prepared for introduction. High costs from prototyping and market research.
Introduction
The product is launched onto the market. Cash flow will be negative from high marketing expenses and low sales.
Growth
Sales of the product should increase significantly. The main aim of the business here is to break-even.
Maturity
Sales begin to level off and revenue generated stabilises. Customer loyalty is achieved so marketing expenses can be lowered and invested into other areas of the business.
Decline
Sales begin to fall, and businesses can either use extension strategies, or allow the sales to decline with little on-going expenditure.
Extension Strategy
A method used to increase the life cycle of a product by preventing or delaying it from reaching its decline.
Types of extension strategies
Advertising
Price reduction
Adding value
Explore new markets
New packaging/Rebranding
Analysis of the product life cycle
It is difficult to say for certain where exactly a product is on the graph at any time, which may lead to a business making an incorrect decision.
Boston Matrix
A method of analysing the products in a business’s portfolio based on realtive market share and market growth.
Types of products in the Boston Matrix
Stars
Cash cows
Question marks
Dogs
Stars
High growth products competing in markets where they are strong compared with the competition. Need heavy investment to sustain growth.
