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A product portfolio is the range of items sold by a business.

A company like Sony has a product portfolio that includes computers, cameras, televisions and games.

Costs of maintaining a large product portfolio

• increased research and development costs due to multiple products being produced
• marketing and advertising costs may be high due to the promotion of a large range of products
• bad publicity incurred by one product may affect sales of all products within the portfolio
• resources may be spread too thin and this could affect the performance of existing cash cow products

Benefits of maintaining a large product portfolio

• having different products can spread risk between markets. This mean there is less chance of a company making losses
• having a range of products can lead to greater brand awareness
• can encourage customer loyalty as customers are more likely to buy multiple products from the same brand
• easier to launch new products due to greater brand awareness
• can meet the needs to different market segments
• can allow for seasonal fluctuations
• allows for new products to replace products at the end of the product life cycle
• can increase profits from selling a range of different products