Product Portfolio Theory


Portfolio theories in marketing are designed to help managers balance risks with rewards when making product-related decisions. A portfolio approach takes into consideration the full array of products that a company offers. A widely used portfolio tool is known as the BCG Growth Matrix. This tool maps a company’s array of products according to two key indicators that represent a balance of risk and reward: the level of relative market share that a product holds in its category and the growth rate of that product category. Using the product categorizations in the BCG Growth Matrix, managers can determine how to allocate their marketing investments.

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