A product portfolio strategy is the collection of all the products or services offered by a company.

Management’s decision about products and its product portfolio strategy to be offered are among the most important of those affecting the future of a company. You will want a great product portfolio management system, especially when you add more and more products.

Before you develop any new products and design a product portfolio strategy do a product portfolio analysis. There are tons of product portfolio template and product portfolio example but these can be used as a guideline only. Your business is different.

No other strategic decision has such an impact, cutting across every functional area and affecting all levels of an organization.

Management of the product portfolio requires a variety of decisions like those confronting the companies that compete globally. 

In this article, I will examine several important product characteristics, product portfolio strategy, and discuss branding strategies.


A product is anything that is potentially valued by a target market for the benefits or satisfaction that provides, including objects, services, organizations, places, people, and ideas.

This concept of a product covers a wide range of situations, including both tangible goods and intangible services. Products include travel services, refrigerators, gas automobiles, enterprise computers, Saas software, and marketing services.

Services differ from physical products in several ways. The service is intangible. It cannot be placed in inventory. If you’re in sales, selling services, I suggest you read ďSelling the InvisibleĒ by Harry Beckwith. The service is consumed at the time it is produced.

The consistency of service often varies. Services are typically perceived with reference to people who produce them. Establishing a brand image for service requires a kind of association with the tangible components that produce the service or are somehow related to it.

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Product Scope of an Organization

The product portfolio for a company may range from a single product to a product line to a mix of product lines.  The possibilities range from a single product or a single line to various lines and specific product combinations.

Product success depends on other decisions as well.

Products are critical to business strategy, but they cannot guarantee business success. Management must match products with market needs and then develop corporate and marketing strategies to meet the needs that are targeted.

Competitive pressures and the changing needs and wants of buyers help to explain why companies focus on planning their product portfolio strategy. Another reason for developing good product management procedures is to reduce the failure rate of new products.

In my experience, insufficient and poor market research is the major cause of new product failures, followed by technical problems, and errors in timing the introduction.

Product strategies are often a key component in top management’s plans for improving the performance of a business. Actions may include modifying products, introducing new products, and eliminating products.

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Marketing’s Role in Product Strategy

Marketing has three major responsibilities in an organization’s product strategy. First, market analysis is needed at all stages of product planning. The analysis provides information for matching new product ideas with consumers’ needs and wants.

The knowledge, experience, and marketing research methods of marketing professionals are essential in product strategy development.

Product market and product portfolio strategy and analysis are needed to find and describe unmet needs It also used to evaluate products as they are developed and introduced and monitor the performance of existing products.

Product evaluation and testing methods are available in the marketing professionalís portfolio of techniques. Several of these methods are discussed in this post.

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Marketing’s’s second contribution concerns product specifications. These are often documented in a product requirements document. Top management is looking for marketing executives to establish characteristics and performance features for products.

Information about customersí needs and wants must be translated into specifications for the product. Research and development people need direction as to where their efforts should be concentrated.

The third contribution of marketing to product strategy is deciding on the target market and program positioning strategies. The marketing leader must select the best strategy for targeting and marketing the product.

This positioning of product attributes to the buyer’s needs is often critical to the success of both. Since a choice of product specifications and position marketers must incorporate product positioning analysis at an early stage in the planning process.

Positioning decisions may concern a single product or brand, a line of products, or a mix of product lines within the business.

Product strategies are important in any kind of business concerned with meeting the needs and wants of people, including wholesalers, distributors, and retailers. Like manufacturers, these marketing intermediaries are concerned with new product decisions.

Like deciding when to expand into new product areas and identifying products that should be eliminated. While many of these decisions involve evaluating, selecting, and dropping products developed by manufacturers, intermediaries they also develop new products and services.

Branding Strategies

corporate branding
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Brand identification offers a company an important advantage. The names that identify a company’s products can be very important in positioning them. The brand name distinguishes a product from competitors’ products. A strong brand identity creates a major competitive advantage. A brand that is recognized by buyers and encourages repeat purchases.

The major branding strategy alternatives are shown in Exhibit 2.

Branding Strategies
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Branding is appropriate for services as well as physical products.

Here’s a question for you. What’s the first thing that pops into your mind when I say performance car. Did you say BMW or maybe Audi? Whatever pops into your head that brand has created mindshare.

No Brand Identity

Many small and mid-sized manufacturers do not have an established brand identity. Even if the company brand name is printed on the package or item.

The lack of financial resources and marketing capabilities make it difficult for a firm with an unknown brand to build buyer awareness in the marketplace.

Major expenditures are required to introduce and promote the brand. The company in this situation often relies on marketing intermediaries to encourage buyers to purchase the unknown brand.

An unknown brand needs the reputation and support of wholesalers and retailers. Buyers relate an unknown brand to the intermediaries they carry the brand.

If their perception of the seller is favorable, then the unknown brand benefits. Typically, the producer of an unknown brand concentrates its marketing efforts on wholesalers and retailers rather than end-users.

Unknown products may develop consumer loyalty over time if users experience with the product is favorable, and if it is purchased frequently. Through extended use, the brand may develop customer loyalty.

Even if a firm doesn’t have the resources to aggressively promote a brand. Marketing management should consider assigning a brand name, particularly if the item is repurchased on a continuing basis. Favorable experience and word-of-mouth promotions with friends can help to build a brand’s reputation with buyers.

Marketing management must decide not to place a brand name on a product if it wants to offer a generic option to buyers. The strategy is used by large manufacturers and intermediaries.

It used to attract buyers who want lower-priced, non-branded equivalents to brand name products, such as tissue, paper towels, and various other frequently purchased products. And this instant, the use of a brand name is inappropriate. Have you ever heard of a company called Brandless? If not you should check them out they sell everything for $3 or less.

Private Branding and Your Product Portfolio

The assignment of a brand name by non-manufacturer is private branding. Companies like Target, The Limited, and Walmart contract with producers to place the retailer’s brand on the products manufactured.

A major advantage to the producer is eliminating the cost of marketing to end-users, although the manufacturer is dependent on the firm using the private brand.

Producing private label merchandise for one intermediary is risky since the arrangement can be terminated by the buyer. Moreover, a mutually satisfactory private branding arrangement benefits both the producer in the middleman.

The producer sales volume can be expanded rapidly. The retailer can use its private brand to build store loyalty.

Especially since the private brand is only available on the retailer store. Private brands are often very profitable for retailers. For example, the profit margin of the private brand carried by supermarkets typically runs 10% to 15% higher than other brands.

Private brands account for nearly 13% of total sales and supermarkets. Consumer preferences for private brands may vary by country. For example, Italians favor national brands.

Corporate Branding

This strategy places a primary emphasis on building brand identity using the corporate name. The brand identity spans the firm’s entire product offering. Examples include IBM in computers, Verizon in communications, and United Airlines in air travel.

Corporate branding offers the advantage of all the company’s products. An establish corporate identity also aids the promotion of new products. The weaknesses of corporate branding include a lack of focus on specific products.

This can have adverse effects on the entire product mix. The corporate name may counter negative publicity. Corporate branding as a primary branding strategy is appropriate when it is not feasible to establish a specific brand identity and when the product offering is relatively narrow.

Product Portfolio Mix
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Product Line Branding

This strategy places a brand name on a line of related products. Examples include Sears Kenmore and Craftsman brand.

Product line branding provides a more focused than corporate branding and is cost-effective by for providing an entire line rather than a specific product.

This branding strategy is effective when a firm has one or more lines, each representing an interrelated offering of items. This branding strategy also has some limitations.

A problem experiencing one item in the line may affect the image of the entire line.

The positioning strategy must support the entire line. This may require excessive resources if management wishes to focus on selected items in the line and or particular customer segments. Plus, the close relationship among the items in the line is desirable.

Specific Product Branding

The strategy of assigning a brand name to a specific product is used by various producers of frequently purchased items. Companies like P&G and Unileverís add product names to their product mix.

A brand name on a product gives it a unique identification in the marketplace. A successful brand can gain strong loyalty over time. Products that represent low-involvement purchases benefit from a popular brand name. The major limitation of brand names on individual products is the high expense of building and supporting a brand.

Through advertising and sales promotions. One flaw is that the brand name may be so popular that it becomes a generic term for the product type. Do you call tissue, tissue or Kleenex? When you need copies do you say I’m going to the copier and going to the Xerox machine?

Companies work aggressively building a new brand name through advertising initially can cost over $50, plus the expense of maintaining the brand identity.


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Combination Branding on Product Portfolio

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The company may use a combination of the branding strategies shown in Exhibit 2 (above).

Some industry experts question the effectiveness of such corporate advertising for inexpensive, frequently purchased consumer brands. For example, companies like Procter & Gamble and Unilever do not actively promote their corporate identity.

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Combination branding is used when the benefits of two branding strategies are great enough to overcome possible limitations.

The strategy typically includes a corporate and line or item brand combinations. The strategy may be used by the private brand retailer to emphasize specific lines.

Combination branding may also be effective for a producer of consumer brands when launching a new brand. The corporate identity and reputations enhance the individual brand’s acceptance by consumers.

Variations in Brand Loyalty for Your Product Portfolio Strategy

Brand loyalty varies by type of consumer product. Loyalty to particular brands is stronger for products with distinctive flavors in the food category. There are indications that erosion of brand loyalty started to occur during the 90s. Heavy promotional programs, bargain prices, and nutritional and environmental concerns cause consumers to shift brands. Brand loyalty varies by age, with older buyers strongly preferring specific brands.

Gaining Strategic Advantage Through Brand Identity

Establish brand names may be useful to introduce other products. The familiar brand name can be used for other non-competing products. The primary advantage is immediate name recognition for the new product. Two methods of capitalizing on existing brand identity our brand extension and licensing.

Brand Extension for Product Portfolio

This strategy uses consumer familiarity with an existing brand name to launch a new product line of a different product type. The new product line may or may not be closely related to the brand from which it is being extended. Examples of related extensions include Hershey’s chocolate milk and Ivory shampoo and conditioner. Apple has done a great job with brand extensions.

Critics of brand and line extensions indicate that extensions often do not succeed and made damage to the primary product. The brand name is weakened when it stands for two things.


The sale of a firm’s brand name on a noncompeting product is a major business activity. Apparel and accessories account for 38% of licensed products followed by toys and games, publishing and stationery, and gifts.  The firm granting the license obtained additional revenue with only limited cost. The creator also gains free publicity for the brand name. This is also a potential limitation if the licensee. It might create an adverse image for the brand.

Licensing can be used for the corporate, product line, or specific brands. Anheuser-Busch (Budweiser beer) is one of the largest corporate licensors.


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Wrap Up Product Portfolio Strategy

Product strategies, which set the stage for selecting strategies for each of the remaining components of the marketing program, forms a leading edge of a positioning strategy.

The product portfolio strategy must be matched to the right distribution, pricing, and promotion strategy. Product decisions are central to shaping both the corporate and the marketing strategy and should be made within the guidelines of the corporate mission and objectives.

Branding strategy for several options, including private branding, corporate branding, product line branding, specific product branding, and combination branding. Brand identification in the marketplace offers a firm and the opportunity to gain a strategic advantage through brand extension and licensing.

How do you determine your product portfolio strategy?

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Are you not getting the results you had hoped for with your marketing agency? Let the experts at†this digital marketing agency†help you with†marketing plans and budgets. Our team knows just what it takes to build and maintain a flourishing website that drives high-quality leads. For more information, check out our†marketing services†or†contact us†to schedule a free consultation to discuss your needs and our services.

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General FAQ’s on Product Portfolio

What is a product portfolio strategy?

A product portfolio strategy is the collection of all the products or services offered by a company.

What is the role of product strategy in a small business?

This concept of a product covers a wide range of situations, including both tangible goods and intangible services. Products include travel services, refrigerators, gas automobiles, enterprise computers, Saas software, and marketing services.

What is marketings role in the product strategy?

Marketing has three significant responsibilities in an organization’s product strategy. First, market analysis is needed at all stages of product planning. The study provides information for matching new product ideas with consumers’ needs and wants.

What is product portfolio management?

Product portfolio management†refers to the practice of†managing†an organization’s entire†product portfolio, which consists of all the†products†the organization has.

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