Portfolio to Optimize Your Resources and Beat the Competition
The way you target the right markets is through segmentation. The way
you optimize your resources is through product portfolios. The way you
beat the competition is by combining these two strategies to leverage
their useful applications in your organization.
Benefits of Segmentation
Segmentation increases your ability to choose the right customers, avoid
investment uncertainty, develop only the right products and improve your
competitiveness on your way to profitable growth. It offers two significant
benefits to your organization. First, it allows you to optimize your
resources (such as R&D) so that you will be able to develop products that
yield maximum returns and avoid marginal products with questionable
potential. Second, it enables you to create clearly differentiated products
so that you will be able to dominate critical segments and keep you
competitors at bay. Furthermore, when properly developed and applied,
segmentation eases business complexity, enables quicker decisions,
reduces cost by avoiding needleless development projects and focuses
your marketing efforts on the vital few segments you have chosen to
Segmentation and Product Portfolios
Product portfolios are a reflection of proper segmentation; this is why we
always link the two. A product portfolio that is not based on a crystal clear
segmentation is of little value — it may even cause you to squander your
resources on products with limited appeal, missing high-growth
Not Just a Marketing Thing
Segmentation is so much more than the marketing department promoting
products and generating leads. Segmentation touches every function in
your organization, from engineering to manufacturing to service and
repair. For example, segmentation allows manufacturing to keep costs low
by outputting fewer models and avoiding unpromising products in the first
place. Segmentation allows R&D to place its best engineers and scientists
on developing products that will bring the most margin and avoid products
where the outcome is doubtful. Segmentation directs your sales force to
the most profitable customers. And segmentation allows marketing to
optimize its message to clearly targeted segments.
Our Team of Seasoned Consultants Will Help You
Let us help you answer these critical questions:
• Which parts of my business are profitable, and which are not?
• Which parts of my business more important, and why?
• Which market areas are growing and attractive, and which should we
• Why do we have so many products in our catalog?
• Which products should we kill, and which should we enhance?