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Product portfolio

Sales of products will eventually decline, as outlined in the four stage product life cycle. Businesses will often attempt to phase out existing products in the decline stage of their product life and introduce new ones. This is what’s known as the product portfolio, product mix.

The product portfolio is made up of product lines, which is a group of similar products; computers, for example, are a product line made up of desktops, laptops and tablets. With the constant launch of new products, businesses need to be careful in order to prevent a ‘vacuum’ forming as products reach the end of their lives.

If a business organises the launch dates of new products at regular intervals, there is never a gap in the market. While one product may be in the decline stage of its life, another will be growing and further launches are likely to be planned. The profits of older products would be used to subsidise the launch of new products. Sweet manufacturers, in particular, successfully manage their product portfolios and constantly seek to launch new products.

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