product portfolio

Question 1

describe product line portfolio

Answer 1

involves having a variety of similar products on sale which can appeal to different market segments

Question 2

describe diversified product line portfolio

Answer 2

involves having products for sale across completely different market segments - spreads risk across all markets in case one fails

Question 3

impact of stars

Answer 3

-need constant investment in marketing to keep ahead in a competitive market
-Stars allow a business to be a market leader.
-Over time, stars will decline into either question marks or cash cows

Question 4

impact of cash cows

Answer 4

-Cash cows should require little marketing expense due to lack of competition.
-Funds generated can be used to further strengthen stars and improve riskier ventures, such as question marks.

Question 5

impact of question marks

Answer 5

-Question marks can be invested in due to their position in a promising market.
-They need development of a strong marketing mix if they are to be turned into stars.

Question 6

impact of dogs

Answer 6

-Dogs can adversely affect profits.
-Dogs should be divested due to the lack of market share and the declining market for the product. They cannot be turned into stars.

Question 7

advantages of a product portfolio

Answer 7

-Businesses can spread risk over different markets.
-A business can meet the needs of different market segments and appeal to more customers.
-Newer products can replace those at the end of their life cycle.
-A range of products increases the awareness of the brand as a whole.
-A business will find it easier to launch new products with a large existing portfolio.
-Cash cows can fund other, riskier, ventures such as the marketing of stars.
-Stars allow a business to be market leader in one area which will improve the brand image overall.
-Question mark products give businesses an opportunity to invest and grow.
-Dogs can be divested to reduce losses.

Question 8

disadvantages of a product portfolio

Answer 8

-There are high costs involved in researching and developing so many products.
-High marketing costs are incurred to promote so many products.
-Bad publicity surrounding one product can affect the whole portfolio.
-Resources assigned to new products may affect the performance of existing products.
-Dogs can drain a business of profits unless they are divested.