The product portfolio is the set of goods and / or services that a company has for sale.
To carry out an analysis of the product portfolios, the following concepts are used to determine their aspects and dimensions:
- Amplitude : Number of lines that a company has.
- Length : Total number of products that are marketed.
- Depth : Number of variations of each product in the line.
- Consistency : Analyze the degree of similarity between the different product lines, taking into account factors such as frequency of use by consumers, manufacturing methods, distribution channels, price, among others.
Product portfolio example
Let’s imagine that AROMA SL is a company dedicated to the sale of perfumes. Among its offer we can find fragrances for each season of the year. Thus, in winter it will have warm touches, in spring it will incorporate floral aromas, in summer it will offer a lot of freshness, and in autumn it will highlight the wood.
The products that AROMA will put on sale will be the following:
In winter they have opted for Fire and Cinnamon; in spring, by Lavender and Wallflower; in summer, by Ocean and Ice; and, in autumn, by Laurel and Almendro.
To locate the amplitude we must identify the number of lines that the firm has, that is, detect products that have similarities between them. In this case, the classification will be dictated by the sensation that the perfume produces, if it is warm, for example, it will belong to the winter product line. On the other hand, if it is floral, it will belong to the spring product line, and if the feeling transmitted by the cologne is fresh, it will belong to the summer line. On the contrary, if it reminds us of the forest for its touches of wood, the line will be autumn. In short, AROMA SL has 4 product lines.
We will calculate the length by multiplying the number of product lines by the number of articles that make up each line. In this case, each line consists of 2 items, so the result would be a length of 8.
The depth refers to the number of variations of the products of each line, in this case, we have 2.
To analyze consistency we can look, for example, in the frequency of consumer use, which although it may be somewhat subjective, we could say that it is used every day, at all times of the year. We could also look at the production model, which in all cases will be similar. And finally, in the distribution channels, which in general will be the same as well. With these data we can affirm that there is a consistency between the 4 lines of AROMA SL products.