Product Portfolio

Question 1

What are the 2 types of product portfolios?

Answer 1

Product line portfolio
Diversified product portfolio

Question 2

What is a product line portfolio?

Answer 2

A product line portfolio involves having a variety of similar products on sale.

Question 3

What is a diversified product portfolio?

Answer 3

A diversified product portfolio involves having products for sale across completely different market segments.

Question 4

What’s on the x axis of a boston matrix?

Answer 4

Market share

Question 5

What’s on the y axis of a boston matrix?

Answer 5

Market growth

Question 6

What are the 4 product types in a boston matrix?

Answer 6

Stars
Cash cows
Question marks
Dogs

Question 7

What are stars?

Answer 7

Products that have a high market share in a high-growth market e.g. Apple iPad.

Question 8

What’s the impact of stars?

Answer 8

Stars 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 9

What are cash cows?

Answer 9

Products that have a high market share of a low-growth market e.g. Microsoft’s Office software.

Question 10

What’s the impact of cash cows?

Answer 10

Cash cows should require little marketing expense due to lack of competition.

Funds can be used to further strengthen stars and improve riskier ventures, such as question marks.

Question 11

What are question marks?

Answer 11

Products that have a low market share in a market with high growth potential e.g. manufacturers of less popular brands of tablet computers.

Question 12

What’s the impact of question marks?

Answer 12

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 13

What are dogs?

Answer 13

Products that have a low market share of a market with low growth e.g. less popular brands in declining technology industries.

Question 14

What’s the impact of dogs?

Answer 14

Dogs can adversely affect profits.

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

Question 15

What are the advantages of a product portfolio?

Answer 15

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.

Question 16

What’s an advantage of cash cows?

Answer 16

Cash cows can fund other, riskier, ventures such as the marketing of stars.

Question 17

What’s an advantage of stars?

Answer 17

Stars allow a business to be market leader in one area which will improve the brand image overall.

Question 18

What’s an advantage of question marks?

Answer 18

Question mark products give businesses an opportunity to invest and grow.

Question 19

What’s an advantage of dogs?

Answer 19

Dogs can be divested to reduce losses.

Question 20

What are disadvantages of a product portfolio?

Answer 20

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.

Question 21

What’s a disadvantage of dogs?

Answer 21

Dogs can drain a business of profits unless they are divested.