product portfolio

Product portfolio

In a simple way product portfolio refers to all that a company has to offer.

PepsiCo’s foods division Frito-Lay is the leader in the branded salty snack market. All its products are free of trans-fat and MSG. It manufactures Lay’s potato chips, Cheetos extruded snacks, Uncle Chips and traditional snacks under the Kurkure and Lehar brands. The company’s high-fibre breakfast cereal, Quaker Oats and low-fat and roasted snack options like Aliva increase the number of healthy choices available to consumers.

Every company addresses to produce and maintain leading edge products. Portfolio management for new products is a dynamic decision process wherein the list of active new products and R&D projects is constantly revised. In this process, new projects are evaluated, selected, and prioritized. Existing projects may be accelerated, killed, or de-prioritized and resources are allocated (or reallocated) to the active projects.

Because of proper portfolio management frito-lay managed to get its premium potato chip brand lay’s maxx from its global portfolio to india via amazon. Present in markets like Europe, USA and Middle East, Lay’s Maxx’s core target audience is young males. The company has tied up with Amazon to launch the product in a 4 pack bundle priced at Rs. 120.

The product is available in two flavors – Sizzling Barbecue and Macho Chilli at price points of Rs. 15 and Rs.30 each.

Goals of Portfolio Management

While the portfolio methods vary greatly from company to company, the common denominator across firms are the goals executives are trying to achieve. Which are.

1. Value Maximization

Allocate resources to maximize the value of the portfolio via a number of key objectives such as profitability, ROI, and acceptable risk.. pepsi very carefully observed the buying pattern of the potato chip market as its already a market leader in salty snack market  available India since a long time.

With its irresistible taste, international and Indian flavours and youth-centric imagery, Lay’s has established itself as a youth brand and continues to grow in the hearts and mind of its consumers.

2.Balance

Achieve a desired balance of projects via a number of parameters: risk versus return; short-term versus long-term; and across various markets, business arenas and technologies.

3.Business Strategy Alignment

Ensure that the portfolio of projects reflects the company’s product innovation strategy and that the breakdown of spending aligns with the company’s strategic priorities. The three main approaches are: top-down (strategic buckets); bottom-up (effective gate keeping and decision criteria) and top-down and bottom-up (strategic check).

Campaign Dillogical -The Dillogical concept made the consumer be dillogical. The campaign deals with the ongoing tussle between head and heart. Lays introduced their new flavor Lime n Masala Masti along with it.

And last year it launched a product maxx “maxx crunch maxx taste”

4.Pipeline Balance

Obtain the right number of projects to achieve the best balance between the pipeline resource demands and the resources available. The goal is to avoid pipeline gridlock (too many projects with too few resources) at any given time.

5. Sufficiency

Ensure the revenue (or profit) goals set out in the product innovation strategy are achievable given the projects currently underway. Typically this is conducted via a financial analysis of the pipeline’s potential future value.

What are the benefits of Portfolio Management?

When implemented properly and conducted on a regular basis, Portfolio Management is a high impact, high value activity:

•             Maximizes the return on your product innovation investments

•             Maintains your competitive position

•             Achieves efficient and effective allocation of scarce resources

•             Forges a link between project selection and business strategy

•             Achieves focus

•             Communicates priorities

•             Achieves balance

•             Enables objective project selection

Top performers emphasize the link between project selection and business strategy.

So to conclude i believe that product portfolio must be carefully managed so that it fetches maximum returns and fulfils all the companies objectives smoothly.

something about product formulation

Lets look what product formulation is..

A key element of successful product innovation is the ability to rapidly and reliably develop new product formulations that meet corporate cost and other constraints while exceeding today’s ever changing customer and retailer expectations.

While formulation is often thought of as a stand-alone activity, product development specialists recognize that it is highly dependent on a wide range of inter-related information and cross-functional tasks.  So even though companies understand how poor management of their formulation eco-system slows time-to-market and introduces costly risks, most aren’t sure what functionality they need to increase their competitive edge.

Here’s your chance to find out!

• Easily and accurately capture, manage, and share ingredient and product specifications, formulations, documents, and other product development information across a project team;
• Easily create and manage prototype ingredients during product formulation;
• Quickly optimize formulations to achieve specific target goals (cost, nutritional values, etc.) based on a set of constraints;
• Eliminate re-keying formulation information into supporting applications, such as ESHA Research’s Genesis® R&D nutritional labeling software;
• More effectively manage formulation and new ingredient validation processes;
• Automatically generate product specifications and other key documents;
• Increase management visibility into product development activities.

what can marketing sell?

What can be marketed for a customer?

Goods

a good is a material that satisfies human wants and provides utility, for example, to a consumer making a purchase while getting an enough-satisfying product.

Ex- smartphone in the current scenario everybody requires a smartphone and marketing can help you know which one is the best one for you.

Service

 a service is an economic activity where an immaterial exchange of value occurs.

You need to travel to your office and you are lazy to drive your own vehicle. You take out your smartphone tap the uber app and there arrives your ride, this is an example of service.

Experience

Intentional activities which immerse people within your brand through the stimulation of their senses, which results in a positive, emotional tie to your company.

Ex- you are a firm which guides the mountain climbers. So you fix a date when your schedule for the adventure and take them up to the decided mountain this creates an experience for all those who join you by paying a charge for the experience you provide them.

Event

The activity of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to promote a product, cause, or organization is called event creation.

Ex- BCCI exhibits IPL every year to provide entertainment to the cricket fans.

Person

Many a times a personality is represented as a brand of the company. This influences the minds of the fans and persuades them to buy the product and service.

Ex- levi’s endorses Akshay Kumar as its brand ambassador. So fan following of Akshay would be inclined to buy the apparels of levi’s

Places

Place branding (including place marketing and place promotion) is a new umbrella term encompassing nation branding, region branding and city branding. Place branding is the process of image communication to a target market.

Ex- goa, india attracts lacs of tourists every year from around the world.

properties

Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks, bonds etc.). Properties are bought and sold, and this requires marketing.

Ex- DLF builds new apartments and to sell or rent it markets its new property.

LIC’s immense advertisement on television to buy its policies.

Organization

Organisations actively work to build a strong, favourable and unique image in the minds of their target publics. Universities, museums, performing arts organisations and non-profits all use marketing to boost their public images and to compete for audiences and funds.

Ex- national railway museum, New Delhi. 

Its all about loyalty!

Customer satisfaction is worthless. Customer loyalty is priceless.

– Jeffrey Gitomer

Customer focus means your business is dedicated to providing goods, products or services that are useful and relevant to consumers. Understanding what your customers want will help you to adapt and evolve with the times. As times change, so do customer needs. Your business should be flexible and should continue to evaluate service and product quality.

Customer needs drive the focus of the company. Businesses often see a need and this is how their idea turns into a firm. It is important to continue to repo with consumers to ensure that this focus is intact.

Business that understands the needs of their customers and are dedicated to providing customer focus will always have a big slice of cake. Consumers need to feel that your product is worth buying.

Observe what competitors offer that you do not and improvise on what you have to offer that they do not. This will help you to understand where the consumer is coming from and you may be able to make adaptations to your services to meet the need of the consumer more efficiently.

Customer centric is not just about offering great customer service, it means offering a great experience from the awareness stage, through the purchasing process and finally through the post-purchase process. It’s a strategy that’s based on putting your customer first, and at the core of your business.

For example:
You can use customer data to understand buying behavior, interests and engagement they are looking for.

You can identify opportunities to create products and services for your best customers.

You can use customer lifetime value to segment customers based on top spending customers and provide them with loyalty rewards.

Not only does focusing on the customer makes business sensible, but research by Deloitte and Touché found that customer-centric companies were 60% more profitable compared to companies otherwise.

The challenges of becoming a customer centric organization

The power shift between brand and customer happened during the economic downturn. Customers became more selective in which brand they chose to spend their money with – The winning brands were the ones who treated their customers with respect, with great service, and built a relationship with them that still exists today. Who are customer oriented.

And during the same time as the recession, social media exploded onto the scene and mobile became a major part of the customer journey. Customers can now compare products and services in real time and across multiple devices, which has presented a huge challenge for many brands.

Research has found that companies are struggling with this change and are unable to become a customer-centric organization – with the biggest challenge not being able to share customer information across departments.

4 Best Practices to becoming a Customer Centric Company

By being customer centric, you will want to anticipate customers’ needs and delight them with products and services they may not have thought of, but will immediately fall in love with (ie, Apple’s iPhone or iPad). Thus, the customer centric brand creates products, processes, policies and a culture that is designed to support customers with a great experience as they are working towards their goals.

The four best practices that stand out regarding customer-centricity are:

Brands that are committed to customer centricity are passionate, and truly believe the customer comes first. They believe that without the customer, they cannot succeed in business (which is true) and want to see the world through the customer’s eyes. Marketers inside customer-centric organizations understand what customers want, and use customer data to capture customer insights and share this across the organization.

Brands that are committed to customer centricity focus on what the customer wants and needs, and develop products and services around that.

Brands that are committed to customer centricity focus on building relationships designed to maximize the customer’s product and service experience.

Brands that are committed to customer centricity analyze, plan and implement a carefully formulated customer strategy that focuses on creating and keeping profitable and loyal customer.

How to measure the success of a customer centric company?

Not every organization will have the same customer metrics to measure customer centricity. However, the two most important customer centric metrics that should be carefully monitored are churn rate and customer lifetime value.

Churn rate

Acquiring new customers is getting more difficult. Therefore, more companies are investing in keeping existing customers instead of trying to find new ones:

Acquiring new customers can cost up to 5x more than keeping existing customers

A 2% increase in customer retention has the same effect on profits as cutting costs by 10%

On average, companies lose approx. 10% of its customer base each year

Companies with a high retention rate grow faster. The key to success is to understand why people leave, and why people remain customers.

To calculate the churn rate, measure the number of customers who left in the last 12 months divided by the average number of total customers (during the same period).

Customer lifetime value (CLV)

For a customer-centric business, the most valuable asset is the customer. The profits generated during the retention phase are often known as customer lifetime value or CLV. Customer Lifetime Value (CLV) measures the profit your organization makes from any given customer.

To calculate CLV, take the revenue you earn from a customer, subtract the money spent on serving them and adjust all of the payments for time value of money. Another way to calculate it is to take average order value and repeat purchase rates. For example, if your average order value is $100 and the repeat purchase rate per customer is 20% your estimated CLV is $120.

Calculating the customer lifetime value helps you understand why it makes sense to invest in keeping your customers. It’s a great way to get an understanding of your customer portfolio and to segment your customer.

Better Customer Experience

 Treat your customers like they are your boss

Focus on measuring customer satisfaction

 Build customer loyalty to increase customer satisfaction

 Remember special occasions like birthdays

Strive to empower and educate customers

Invest in a self-service support channel

Top level managers must lead from the front with customer service

Talk to your customers, tap into what they want and deliver

Avoid making these customer retention mistakes

Set customer expectations early

You are ignoring customer feedback

You are taking customer feedback to personally

You are using long, boring customer feedback surveys

Learn how to survey your customers the right way

Email is the best channel to increase customer satisfaction

59% of B2B marketers believe email marketing is still the most effective channel in generating revenue.

If it’s so good for marketers, why don’t we use it more to increase customer satisfaction?

That’s a good question, and I want to touch on three quick practical examples of companies who are using email to increase customer satisfaction.

 Tap into social media to track and monitor customer satisfaction so you can keep your customers happy

Increase Customer Satisfaction with Social Media

With your customers now using their mobile phones up to 150 times per day, it’s important to recognize that they will turn to social media to leave their customer complaints.

Your job is to make sure you use social media monitoring tools to keep track of positive and negative feedback, and resolve them accordingly.

In fact, social media provides a great opportunity to actually increase customer satisfaction.

Here’s how you can do just that:

Use social media to monitor brand mentions and sentiment

Use social media as a customer support channel

Use social media to hold Q&A sessions with customers

Increase customer satisfaction by focusing on the customer experience

The customer experience is where business is won and lost. Whether it be through email, social media, customer surveys or good old face to face, as a business in 2014, you need to focus the on customer experience.

Remember, in a reality where your customers pay your paychecks, to increase customer satisfaction – you must treat customers as if they were your boss.

Darwin's theory on biological evolution stands good for business evolution too. In today’s competitive world survival of the fittest is most evitable. Flipkart the 15 billion dollar giant faced some issue regarding its sellers. As reported by Redseer flipkart’s advisory group that only 30-40 % of the sellers are active on monthly basis out of 90000 sellers listed at flipkart. And also only one in a six seller has a product portfolio of 500+ items that flipkarts claims to sell. One in three gets 100 orders a month and half of them get less then 50 monthly. Sellers with less listed items, sellers who sell fake products and seller who refurbish the old product into new are a source of customer dissatisfaction and competitive disadvantage for flipkart. And therefore in flipkart’s new policy which is customer oriented a lot of sellers are blacklisted from flipkart’s vendor base.

To narrate an incident which i personally suffered was when i wanted to buy an earphone and after making use of the flipkart’s amazing app interface i picked an earphone and to my surprise the price of the earphone i wanted was available with a seller at much cheaper price compared to other sellers in the list. So without much hesitation i ordered it from that seller. After a couple of days when i got the courier and was unpacking it with an excited mood which lasted only till i found out that right side of the earphone was damaged. No doubt i immediately requested for flipkart’s easeful return policy but the dissatisfaction i faced made me feel more inclined towards its severe competitor amazon.in and i ordered my earphone from it. So here because of the carelessness or unethical seller flipkart lost me as its customer.

Sellers are expected to adhere to standard guidelines if they want to continue business with flipkart. Sellers found violating these rules are blacklisted from their platform. To ensure ethical business practices among sellers, flipkart have a strict seller review/rating process which is left in the hands of customer. And also internal quality check on sellers which is done by flipkart itself. When you have your competitor as amazon.in you can’t goof up yourself. Customer focus is the key to success in current business scenario. And every organization that satisfies its customer books its place in the best spot of market.