Pharmaceutical Marketing Product part 2

Lecturer: Enas Abu-Qudais

Product portfolio

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

• Many companies are multi products and serving multiple markets segments

• Portfolio planning: Managing group of brands and products

Portfolio Planning(analysis) • Involves decisions on the choice of which brands/product lines

to build, hold, harvest or divest.

• Companies must decide how to distribute their limited resources among the competing needs of products to achieve the best performance for the company as a whole.

• Portfolio planning is done using the BCG matrix.

BCG growth-share matrix

Boston Consulting Group Growth-share matrix

Ma

rk

et

Gr

ow

th

Relative Market share

BCG Elements

• Stars • The market leaders in high growth markets.

• Already successful products.

• Have the Highest Profitability

• Objective is to build sales and/ or Market share

Question Marks

o They are cash drains. o They have low profitability o Needs investment to keep up with the Market growth o The company has to choose(Objective): Build to turn into stars

Harvest( raise prices) or Divest (dropping or selling it)

• Cash Cows • High profitability in low growth markets

• Objective: Hold sales and market share

• Excess cash is used to fund stars and

the selected question marks

Dogs o Weak products that compete in low growth

markets o Failed to achieve market dominance o Objective: Harvest or divest

Build, harvest or divest

Hold

Build

Harvest or divest

Question marks

Question marks

Growth Strategies

Product life cycle (PLC)

Conceptualizing the changes that may take place during the time that the product is in the market

Stages

• Introduction : Product’s sales growth is typically low and losses happen due to heavy development and promotional costs and no profit.

• Growth: faster sales and profit growth.

• Maturity : peak of sales as saturation occurs

• Decline: sales and profit fall. For example due to a new technology or change in consumer taste or demand

Stages objectives

Introduction Growth Maturity Decline

Strategic marketing objective

Build Build Hold Harvest/manage for cash/ divest

Strategic focus Expand Market Penetration Protect share/ innovation

Productivity

Brand objective Product awareness/Trial

Brand preference Brand Loyalty Brand exploitation

Product Basic Differentiated Differentiated Rationalized

Promotion Creating awareness / Trial

Creating awareness/ Repeat purchase

Maintaining awareness/Repeat purchase

Cut/eliminated

Price High Lower Lowest Rising

Distribution Patchy Wider Intensive Selective

Product strategies for growth

(Ansoff matrix) A matrix the determines how growth can be achieved through product

strategy to look for growth opportunities.

Ansoff matrix

Market penetration: growing existing products in existing markets(Growing sales).

Product development: Developing new products for existing markets.

Market development: taking existing products and marketing them in new

markets.

Diversification: developing new products for new markets.

Most risky strategy