Lessons from your local farmer's market

There are few things more refreshing to the soul on a warm, summer morning than heading out to the local farmer’s market and capturing the scent of fresh produce. If you’re lucky, you’ll also find some unique crafts and a stand with some delectable baked goods.
But are there valuable business lessons to be learned from our local fruit and vegetable vendor? As it turns out, there are quite a few.
The vendor is the consummate product portfolio manager.
She has one crystal-clear goal: maximize profits. She faces many challenges: perishable products, finite quantities, a fixed location with limited marketing opportunities to get the word out about her vegetable stall, and dynamic and abundant competition from neighboring stalls.
In order to succeed, she must have her finger on the pulse of which product display and sales pitch attracts customers, what price moves the product and which bundling of products maximizes sales.
In addition, what are her inventory levels, and which product is at the highest risk of spoilage and/or being unsold?
Portfolio strategy
To maximize profits, she must manage all the above factors, and manage the inherent conflict of pitching one product against the other.
Her customers have a finite appetite. Once they reach their limit for a certain amount of fruits and vegetables, they buy no more. She must first pitch the combination of products to them that is the most beneficial for her to sell. She must also have the ability to read her customers well.
Are they overly price-sensitive? Are they in a hurry? Are they window shoppers? How much are they willing to pay for quality?
As you develop your product portfolio strategies, you have an even more difficult challenge. Your products are more complex, and the buying process more involved. Shifting emphasis on products is not as easy as flipping a switch. Given your higher challenge, you need a stronger and more well-designed product portfolio strategy.
Having a portfolio of products versus a single product can offer many benefits to an enterprise while also introducing risks. One benefit of this strategy is that a portfolio can be a mixture of high cash flow and high-growth products providing short-term stability and long-term growth prospects.
The risk lies in inadequate management of the portfolio where individual product managers serve micro-imperatives versus macro-imperatives.
Active management
Some companies develop a portfolio of products by default.
Not much thought is given to active management of the entire portfolio. A portfolio isn’t simply a collection of products — the whole must be greater than the sum of the parts. A portfolio manager must optimize for the long and short term, the risk versus reward, survival versus growth and investment versus profit.
In addition to managing these competing imperatives, a portfolio manager must manage the inherent competition between products for resources and attention. Like the vegetable vendor, you must opportunistically and dynamically adjust your product emphasis to maximize returns.
You must evaluate each product individually, and then the entire portfolio as a whole. ●