Product portfolio analysis

product life cycle

• introduction

• growth

• maturity

• saturation

• decline

introduction

• prices may be low to initial sales,

• heavy promotion to create awareness,

• low number of product variations launched

growth

• price may increase with popularity

• new varieties and distribution methods introduced

• business must keep up with demand growth

maturity

• customer cutting price to maintain demand

• promotion slows as customers aware of products

• introduction of new customers slows- focus instead on retention and repeat purchase.

saturation

• market is “full” - all potential customers have the product are there are other better/ cheaper alternatives

• prices may be cut to maintain competitiveness

decline

• further price cuts to maintain demand

• variety of products streamlined to most popular

• may need to consider discontinuing product if replacement can be introduced.

• an extension strategy may be used to re-launch prouduct, to boost new growth, eg slight modifications may be made to the design and packaging of product to make it appear new

life- cycle curve

• not all products have same- life cycle curve,

• fad products may grow and decline very quickly whereas some products will maintain maturity for a long time.

the value of PPA- adv and disadvantage

• + - useful analysis tool for a business with trade product range

• +- useful for making decisions about where funds should be allocated

• +- can be used to predict future sales and therefore plan production/distribution.

• - = products and markets are complicated and don’t necessarily follow a pattern

• - = does not provide clear soloutions for a business

• - = as with all models, PPA simplifies what can be a complex issue

Boston Matrix

• stars= possibly a leading brand in the market, distribution must be effective to ensure product availability

• question marks= fast growing marketing, not yet established product, normally requires heavy investment to develop and ensure success, usually lots of competition from rival brands.

• dogs= invest to revitalise or discontinue the product

• cash cows= successful products in mature markets, cash cows generate high revenue for a business that can invested in other areas, relatively little promotion