Author: Rafael Muñiz
27 pages
10 eur + iva
to buy
12. Analysis of the portfolio of products
As we are advancing in the time, the proper dynamics of the market imposes his guidelines on us; it is then when we begin seeing certain obsoleteness symptoms in some of our products, good for changes in the fashions, technological advances, you improve in the products of the competition, modifications in the materials or, simply, for eliminating, partly, the need by which they had been created. All this leads to the appearance on the market of new products that they satisfy better or in a different way the needs that until now ours realized.
The majority of the companies without marketing optics realizes this work only when there begin taking place important economic losses or accumulations of stocks in his stores. Really a company that wants to be competitive cannot allow itself these luxuries or mistakes in his planning, for what will have to realize permanent studies of the profitability and acceptance of his scale, in order to take measures facing the best commercial viability of his products.
Nevertheless, and according to my experience, I can say that the decision to leave a certain product is a difficult and complicated task. There are cases in which one has been a lot of time tied to a certain product. In others, this product is the real maker of the consolidation like company. Kotler already says it «... they will devote themselves to invent procedures to hide his weakness, the sellers will redouble his efforts and the product will come to the stores of the merchants, although the client does not feel a big attraction for him. To avoid his disappearance, the commercial area will support him, even, with the expenses budget to try to increase the sales artificially». But this situation will not be able to be supported in a lot of time and in the end the product will end up by falling down.
Any company with future vision must raise the obligation to realize a periodic and systematical analysis of his portfolio of products independently of the BCG already treated in the chapter 2; with it we are not saying that all that product that should not be profitable should disappear of the market, since they exist a series of intangible, as it is the image of company or of mark, which they advise that a certain product should remain in the catalog. Generally, one thinks about the abandonment when it is not profitable, but not always it is advisable to do it immediately, since a series of internal causes can exist in the proper company that are those who motivate the economic not viability of the same one. Therefore, before realizing it, it is convenient to check the following circumstances:
- Progress of the design. A commercial premise that seems unquestionable is that the design of the product is always improvable, although it is modified usually to request or direct or indirect suggestion of the user.
- Obsoleteness in the manufacture methods. The absence of profitability of many products here in Spain is a consequence of the low levels of competitiveness in the existing manufacture systems, therefore the solution to obtain competitive costs will be to renew the manufacture systems before leaving the product or selling the company to a multinational, as this way it is happening.
- Safety. There are products that do not offer full safety to the users and lead the company to incurring high losses for indemnifications or a commercial and technological disfavor, with what his modification is inalienable.
- Profesionalizar the management. Other causes that they contribute to the scarce profitability of a product are a bad sales management, bad distribution or scarce marketing work, therefore it would be necessary to promote the activity by means of the formation and/or incorporation of more qualified personnel.
- Collaboration of third. In certain cases we have seen how companies that had a good commercial team, a good product and a good market, but a bad production process, were deciding to leave the product for not being profitable, instead of entrusting to a third one the production and centring on his strong points, tendency much accentuated in the multinational companies.
In any case, as soon as there was realized this exhaustive analysis, which has given us like answer the expediency of leaving the product, we will have to consider a series of actions before his entire abandonment:
- Implied collaborators, who will have to be restructured inside the company or to stopped.
- To determine the guarantees time in the service.
- Articles that must be supported in stores for later arrangements and maintenance.
- Stock of prime matters.
- When and how do the clients have to be informed.
- Possible utility of the machinery and facilities that it served to us for the achievement of the product.
Undoubtedly, we might contemplate more actions if we knew of what product it talks each other; the common thing to all and essential to realize once has the decided abandonment it is to fix the execution deadline, as well as the concrete persons in charge who will carry out it, and who will continue of rigorous form the program marked to the effect.


