jump to content of this page Bized logo linked to homepage
You are here: Home > Educators > Business Studies > Marketing > Product Portfolio Analysis - Activity

Educators

Advanced

Product Portfolio Analysis - Activity

Different coloured post-it notes

The aim of this Activity is to investigate Product Portfolio Analysis and in particular to analyse how products are developed and then manipulated to maintain their market share and market profile. The Activity will focus on one product - the humble 'Post-it' note. This product has become an essential piece of equipment for a whole variety of people from householders, to remind them about things that need doing, to office workers and to students. It has been developed to take account of the revolution in the use of PCs and has even been the central part of a plot in a BBC TV comedy programme, 'One Foot in the Grave', where the central character is a frustrated pensioner battling against old age and society's view about the role of the elderly.

'Post-it' notes, like many other products, have an interesting history. Before we investigate this product in more detail, let's look at two examples of popular products that originated in unusual circumstances but which have gone on to generate billions of pounds worth of sales throughout the world. It demonstrates how some products can be developed accidentally but also how some products need years of work before they become commercially viable!

Image: Different coloured post-it notes. Copyright: Ákos Rappay

A Sweet Discovery

Innkeeper Ruth Wakefield was baking Butter Drop Do cookies one day in the 1930s using a recipe that dated back to colonial times. She cut up a Nestlé chocolate bar and put the chunks in the batter, expecting them to melt. Wakefield thought she'd be pulling chocolate-flavored cookies out of the oven. Instead, what she got were butter cookies studded with gooey chocolate chips. Her mistake became one of the most favorite cookies of all time.

I'll Drink to That

Coca-Cola was the result of another delicious accident. In 1886 a pharmacist named John Pemberton cooked up a medicinal syrup in a large brass kettle slung over an open fire, stirring it with an oar. When he was done, he figured he had created a fine tonic for people who were tired, nervous, or plagued with sore teeth.

He and his assistant mixed it with ice water, sipped it, and proclaimed it tasty. They wanted some more, and the assistant accidentally used carbonated water to mix the second batch. Voila! Instead of medicine, these men had created a fizzy beverage - one that is now consumed around the world.

Today people guzzle 1 billion drinks a day from the Coca-Cola company (they make more than Coke). Even more encouraging for us everyday screw-ups: This new beverage wasn't an instant success. In the first year, Pemberton spent $73.96 promoting his new product but managed to sell only $50 worth.

Source: Reproduced with permission from the Institute of Internal Auditors Edmonton Chapter

Post-it notes

Look at the following Web sites that give some background information about the circumstances in which Post-it notes were developed.

  • Inventor of the week archive - from Massachusetts Institute of Technology (http://web.mit.edu/invent/iow/frysilver.html)
  • Art Fry and the invention of post-it notes - from 3M, the company that developed and manufactured the product (http://www.3m.com/about3M/pioneers/fry.jhtml)
  • 3M product page - gives you hints to help with the task set below! (http://www.3m.com/us/office/postit)
  • Post-it notes - Art Fry and Spencer Silver - from about.com, a Web site with links to dozens of other inventions - interesting to see where some products have come from! For example, do you know where Barbie and Ken got their names? (http://inventors.about.com/library/inventors/blpostit.htm)
  • Growth-share matrix - from the Boston Consultancy Group - the founders of the Boston Matrix (http://www.bcg.com/this_is_bcg/mission/growth_share_matrix.html)

The Task

Having researched information about the 'Post-it' note product, conduct a product portfolio analysis incorporating both product life cycle and Boston Matrix to present a report to the Directors of 3M on the current and future position of the product with a recommendation on how you see its longer term future.

Your report should be 1000 words in length, not including appropriate diagrams.

Guide to your analysis

When thinking about your report, you may wish to consider the following as a guide to the structure.

  • Think about the current position of the 'Post-it' note - where on the product life cycle or Boston Matrix do you think it is and why?
  • Is the range of Post-it note products in itself a portfolio to be managed or are you managing the brand?
  • Are there markets that have not yet been considered that could be exploited in the future?
  • What impact will the further development of technology have on the future of the 'Post-it' note - think about the developments in computer technology, hand held computers, mobile phones and so on!
  • Consider the type of market that you think the products will be in - is it a growing market? How much market share does the product have?
  • Once you have decided on the position of the product in the Boston Matrix, think about the implications of this position - how much money will have to be spent on the product to maintain its market share? Who are the competitors?
  • What are the prospects for establishing extension strategies to help maintain the product?

Your report could be presented in a traditional written format or you could do a verbal presentation supported by some slides or even a video presentation if you have access to the facilities. (You could imagine that you are able to do the presentation to the Directors via a video-link!)