Any company with a line of products that is seeking growth and development should be continually motivated to review its product portfolio with the objective of optimizing return on investment. A consulting firm survey showed that while 80% of business executives rate “becoming more innovative” in their top three must do’s, only 66% are satisfied with their company’s success.
The mix of products should be aligned with gaps in the market, not an internal perception of what the company’s products should be. Product management requires development of products that better meet customer’s needs. Good product management should also ensure that the company’s process for innovation and product development will position it for future success.
There are benefits on many levels. A better product mix is more profitable, increases productivity for the company by eliminating excess SKUs, and fosters customer value – as the customer gets the desired products when they want them.
S2 Thinking Partners can help to establish a clear process for looking at the product mix relative to cost, as well as helping to rationalize products, create new ones, understand the value to customers, and maximize profitability. We use a proven Six Sigma methodology to drive the right mix and eliminate rotten apples.
Questions worth thinking about
- Do you want to sell multiple products once or one product many times?
- Have you trained your customers to expect a fire sales?
- Do you understand the cost to serve your customer?
- Do you ruthlessly rationalize your product portfolio?
- Are you a market leader in terms of launching new products?
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