For product or category managers navigating the competitive landscape, the experience can indeed feel like a balancing act, caught between competing pressures and rapidly changing market conditions. As global dynamics evolve, the task of managing a portfolio’s product variants becomes increasingly complex, often necessitating swift, tactical decisions.
Internal and external pressures
Internally, the drive to reduce production, logistics, administrative, and sales costs — such as shelf space — may lead managers to consider reducing the number of product variants. Conversely, the goal of enhancing sales and market share may require an expansion of variants to cater more effectively to diverse consumer segments in the market.
Even when the product assortment seems optimal, external factors such as new competitor strategies or emerging consumer trends might demand adjustments. These adjustments could include changes to product features, pricing, packaging, or marketing propositions, which are essential when reevaluating the portfolio’s breadth.
The synergistic potential
Making these changes in isolation could overlook the synergistic potential akin to an orchestra, where the collective effect of the instruments creates a resonance greater than their individual contributions. This underscores the necessity for product or category managers to master the art of portfolio re-composition, ensuring the coordination of differentiated feature packages, price ranges, and more, across all products simultaneously.
Furthermore, when different sales channels are involved, this complexity increases as it necessitates the definition of channel-specific portfolios, thereby multiplying the decision-making layers required.
DECISIONS CAN BE IMPROVED
It is therefore not unexpected, based on our interactions with product and category managers, that many decisions are often informed by historical experiences. These experiences, inherently constructed from accumulated data, contribute to organisational learning as they facilitate a feedback loop that correlates actions with their resulting outcomes. But it usually doesn’t consider the complexity of the various marketing parameters to optimise but rather builds on heuristics derived from past experience.
Therefore, the quality of these decisions could be significantly enhanced through the implementation of tailored research initiatives. These projects, designed to be both time-efficient and cost-effective, are crucial yet underutilised in product and category management. This oversight often results in a quality gap in decision-making across various brand portfolios.
CMI SHOULD PLAY A VITAL ROLE
Given the rapid changes occurring globally, there is a growing imperative for support from Consumer and Market Insights (CMI) professionals. By expanding their consultancy services to category management, CMI professionals can offer solutions that strategically* and tactically optimise product portfolios. This approach not only addresses immediate needs but also positions brands more favourably for future challenges.
Brand Growth
From the many client conversations we have, we see that marketing professionals seem to pay a great deal of attention and importance to more strategic portfolio management. Joakim Wictorin, Sales & Marketing Director Nordics from GB Foods for example shared that they prioritise portfolio management through a brand-building approach, emphasising local consumer preferences and flavors. They measure success through market share and sales as KPIs, ensuring their product portfolio remains competitive in market shifts. Joakim Wictorin highlighted that innovation drives their portfolio growth, adapting to sustainability, convenience, and health trends.
Dr. Hauschka, CEO of Benelux from Marlijn van Straaten said that their portfolio management strategy is geared towards increasing distribution across drugstores. They prioritise holistic brand experiences while leveraging promotional products strategically to align with the brand identity. This aids in customer retention and engagement. The more tactical and “hard-number crunching” tactical optimisation of current portfolios in the market where not much present in our conversations, though.
