Product Management and Portfolio Strategy

Understanding the Product and Its Elements

The product is the primary means to satisfy a desire or need. Products can be tangible, characterized by their physical attributes, or intangible, such as car insurance. Two key elements that exist simultaneously are the commercial attributes of a product (including product design and added services) and brand packaging, alongside the monetary value.

Management of the Product Portfolio

A product line is a group of products that are related to each other because they share similar characteristics. Key features include:

• Width: Indicates the number of different product lines offered by the company.
• Length: The total number of products or references that a company sells.
• Depth: The number of references for each product within each line; the greater the number of references, the greater the depth of the line.

Roles Within a Product Line

• Leading products: These are the products that lead in sales and profits.
• Regulator products: Products that complement and regulate the supply.
• Tactical products: These aim to attack the competition.
• Attraction products: These are used to attract customers to other products in the line.

Determining the Ideal Product Line Length

The ideal length depends on the objectives of the company, such as growth or profitability. Long lines with many references allow for further growth and market share, though at the expense of increasing costs. Conversely, if a company seeks profitability, it may opt for short lines formed by a selection of products that provide high returns.

Classes of Products

Classification by Duration

• Durable consumer goods: Items that can be used many times over a long period (e.g., a TV).
• Perishable goods: Items that are consumed quickly and frequently (e.g., milk).
• Intangible assets: Services or non-physical products (e.g., a medical office).

Classification by Final Destination

Consumer products are those purchased by end-users. Depending on the frequency of purchase and the effort made by the consumer, they include:

• Current goods: Items bought on impulse (e.g., batteries).
• Emergency goods: Items bought out of immediate necessity (e.g., umbrellas, medicine).
• Specialty goods: High-involvement purchases (e.g., jewelry).
• Sporadic goods: Items bought occasionally (e.g., appliances).

Industrial products include raw materials, heavy equipment, auxiliary equipment, components, materials, supplies, and industrial services.