Price, product, promotion and place (4Ps): Product portfolio Students…

The idea

A product portfolio is the full range of goods or services a business sells. Broadening means adding products, perhaps to spread risk so that weak sales in one line are offset by strong sales in another, or to reach new segments. Balancing means keeping a mix of products at different life-cycle stages so cash from mature lines funds newer ones. The Boston Matrix helps: it plots each product by market growth and relative market share. A business can then decide whether to invest in a star, milk a cash cow, build a question mark or drop a dog.

For example: A soft-drinks firm might use profits from a long-established cola to launch a new energy drink.

What earns the marks

• Define product portfolio as the complete range of products a business offers, and broadening as increasing the number or variety of products within that range.
• Explain that broadening spreads risk: if demand for one product falls, revenue from others can sustain the business.
• Explain that broadening can also target new market segments, increasing total sales and spreading dependence across more customers.
• Define balancing as maintaining a mix of products at different stages of the product life cycle, so that mature products generate cash while newer products are developed.
• Describe the Boston Matrix as a tool plotting products by market growth rate and relative market share, producing four categories.
• Apply the matrix to a named business: identify a likely star, cash cow, question mark and dog, and justify each placement using growth and share.
• Recommend a strategy for each category, such as investing in a star, harvesting a cash cow, selectively building a question mark or divesting a dog.

Common mistakes and how to put them right

• Treating the Boston Matrix as a measure of profit rather than of market growth and relative market share.

  Put it right by stating the two axes when placing a product.

• Assuming every dog should be dropped immediately.

  Put it right by noting that a dog may still generate cash or support other products, so the decision depends on the business's objectives.

• Confusing broadening with balancing.

  Put it right by defining broadening as adding products and balancing as managing the mix across life-cycle stages and matrix categories.

Exam tips

• When asked why a business broadens its portfolio, link each reason to a consequence such as reduced risk or higher sales, rather than listing reasons alone.
• Use a real or invented business context and name specific products when applying the Boston Matrix, so your analysis is concrete.
• For balance questions, refer to cash flow: explain how income from one category can fund investment in another.