Portfolio

Posted in Marketing and Strategy Terms, Total Reads: 829
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Definition: Portfolio

Portfolio refers to a collection/ group of objects- assets, generally, securities or investments (such a stocks, bonds etc.). They are held by investors/ companies and managed by functional experts.


The purpose of creating a portfolio is to minimise risk associated with individual items. When these items come together to form a group, the risks get minimised and returns become ore probable.

For example, if item A and B are clubbed to form a portfolio C, the maximum loss is

 

Loss (C) = Loss (A) + Loss (B)

 

And

 

Gain (C) = Gain (A) + Gain (B)

 

This was also possible with individual items. However, by clubbing them in a portfolio, losses of one can be compensated by gain in another as {Gain (A) + Loss (B)} Or {Loss(A) + Gain (B)}.

 

From a marketing perspective, a company may have a product portfolio, i.e., a variety of products to address various needs of a customer. The aim is to meet needs of a customer through a comprehensive approach and maximize benefits.

 

For example, HUL has a broad product portfolio across soaps, oil, detergents, cosmetics etc. with each category having a range of products.

Under Soap, HUL has Lifebuoy, Dove, Hamam, Lux, Pears etc.

Under Detergent, HUL has Vim, Wheel, Rin etc.

Under Cosmetics HUL has Lakme, Ponds, Vaseline etc.

 

Hence, these form a comprehensive set to address the needs of the customer.


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