5 - Product Portfolio

Question 1

product portfolio management strategy

Answer 1

companies should maintain comprehensive market coverage w/ minimal overlap
- balance coverage = to minimize cannibalization

Question 2

product mix breath vs product line depth

Answer 2

breadth: variety + n of product lines offered by a firm (product categories)

depth: n of items in a product line (satisfying different sub-segments w/ different needs)

Question 3

why manage product portfolios?

Answer 3

• efficient allocation of resources
• identity underperforming products + gaps

Question 4

outcomes of managing the product portfolio

Answer 4

understand:
- visualization (how offering covers the market)
- financial contribution (ex: revenue, market share…)
- strategic roles (of the product)

change:
- line pruning (discontinue + revitalize underperforming products: increase efficiency + avoid cannibalization)
- line extensions (cover gaps - increase coverage)

Question 5

financial contribution of brands

Answer 5

BCG growth matrix - for prioritizing brands by the degree of profitability (x: market share, y: category growth)

• cash cow (minimal investment + high return)

Question 6

BCG ideal cash movement

Answer 6

excess cash from cash flows is invested in “?” so they become stars -> stars become cash cows when growth slows down
- pets should be analyzed to increase information value

Question 7

strategic brand roles

Answer 7

focus brand: strong results + consumer following

support brands:
- fighter brand (low value offering)
- niche (narrow segment)
- past champion (cash cows)
- silver bullet (aspirational - birkin)
- entry point (affordable)

Question 8

4 categories of brand extension

Answer 8

• line extensions (portfolio depth)
• category extensions (portfolio breadth)
• customer extensions
• channel extensions

Question 9

line extension

Answer 9

transfer the existing brand name to a new product in the same line
- ex: new flavors, sizes, formats…

horizontal: same quality level but for different tastes
vertical: downmarket + upmarket

Question 10

category extension

Answer 10

transfer the existing brand name to a new product outside the product category

• more risk

Question 11

customer extension

Answer 11

using existing brand on new products for different segments (ex: dove women -> men)

Question 12

channel extension

Answer 12

expand to different distribution channels

Question 13

Levi’s Case

Answer 13

no one perceived Levi’s as a brand that sells suits
- did not fit into brand’s “non-conformity”

• market research must inform decision
• inside view is often biased (internal bias)
• brand associations often limit brand extensions

Question 14

impact of portfolio on individual products

Answer 14

high priced products (set price anchor)
asymmetric dominance (decoy effect)
compromise effect (middle b/w 2 extensions)

Question 15

leveraging a brand into new offerings: where to expand?

Answer 15

• consider brand associations
• identify product categories
• evaluate attractiveness of categories
• determine positioning

Question 16

brand architecture system

Answer 16

branded house (fedEX office…)
sub-brand (apple iphone, ipad…)
endorsed brand (mariott hotels)
house of brands (unilever)