Product mix

Product Mix

1. PRODUCT MIX

2. WHAT IS PRODUCT MIX?
Productmix,alsoknownasproductassortment,referstothetotalnumber
ofproductlinesthatacompanyofferstoitscustomers.Theproductlines
mayrangefromonetomanyandthecompanymayhavemanyproducts
underthesameproductlineaswell.Alloftheseproductlineswhen
groupedtogetherformtheproductmixofthecompany.
Theproductmixisasubsetofthemarketingmixandisanimportantpart
ofthebusinessmodelofacompany.Theproductmixhasthefour
dimensionsorcomponents:

3. Width
Thewidthofthemixreferstothenumberofproductlinesthecompanyhasto
offer.
Forexample–ifacompanyproducesonlysoftdrinksandjuices,thismeans
itsmixistwoproductswide.Coca-Coladealsinjuices,softdrinks,and
mineralwater,andhencetheproductmixofCoca-Colaisthreeproducts
wide.
Length
Thelengthoftheproductmixreferstothetotalnumberofproductsinthe
mix.Thatisifacompanyhas5productlinesand10productseachunder
thoseproductlines,thelengthofthemixwillbe50[5x10].

4. Depth
Thedepthoftheproductmixreferstothetotalnumberofproducts
withinaproductline.Therecanbevariationsintheproductsofthesame
productline.Forexample–Colgatehasdifferentvariantsunderthe
sameproductlinelikeColgateadvanced,Colgateactivesalt,etc.
Consistency
Productmixconsistencyreferstohowcloselyproductsarelinkedto
eachother.Lessthevariationamongproducts,moretheconsistency.For
example,acompanydealinginjustdairyproductshasmoreconsistency
thanacompanydealinginalltypesofelectronics.

6. PRODUCT MIX VS PRODUCT LINE
Aproductmixisagroupofeverythingacompanysells.
However,theproductlineisasubsetoftheproductmix.Aproductline
referstoauniqueproductcategoryorproductbrandacompanyoffers.
Forexample,Patanjalidealsindifferentcategoriesofproductswhich
includeshampoo,flour,toothpaste,etc.Shampoo,here,formsadifferent
productline,flourformsadifferentproductlineaswell,andsodoes
toothpaste.However,whentheyallaregroupedtogether,theyformthe
productmixofPatanjali

7. Coca-ColahasproductbrandslikeMinuteMaid,Sprite,Fanta,
Thumbsup,etc.underitsname.Theseconstitutethewidthof
theproductmix.
Thereareatotalof3500productshandledbytheCoca-Cola
brand.Theseconstitutethelength.
MinuteMaidjuicehasdifferentvariantslikeapplejuice,
mixedfruit,etc.Theyconstitutethedepthoftheproduct
line‘MinuteMaid’.
Coca-Coladealsmajorlywithdrinkingbeverageproductsand
hencehasmoreproductmixconsistency.

8. PRODUCT MIX STRATEGY

9. Asuccessfulproductmixstrategyenablesacompanyto
focuseffortsandresourcesontheproductsandproductlines
withinitsofferingsthathavethegreatestpotentialfor
growth,marketshare,andrevenue.

10. 1. EXPANSION OF PRODUCT MIX
(LINE STRETCHING)
Expansionofproductmiximpliesincreasingthenumberofproductlines.New
linesmayberelatedorunrelatedtothepresentproducts.Forexample,Bajaj
Companyaddscar(unrelatedexpansion)initsproductmixormayaddnewvarieties
intwowheelersandthreewheelers.Whencompanyfindsitdifficulttostandin
marketwithexistingproductlines,itmaydecidetoexpanditsproductmix.
Forexample,HindustanUnileverLimitedhasvariousproductsinitsproductmixsuchas:
(1) Toilet soaps, detergent cakes, washing powders, etc.
(2) Cosmetic products,
(3) Edible items,
(4) Shaving creams and blades,

11. 2. CONTRACTION OF PRODUCT MIX:
Sometimes,acompanycontractsitsproductmix.Contraction
consistsofdroppingoreliminatingoneormoreproductlinesor
productitems.Here,fatproductlinesaremadethin.Somemodels
orvarieties,whicharenotprofitable,areeliminated.Thisstrategy
resultsintomoreprofitsfromfewerproducts.IfHindustanUnilever
Limiteddecidestoeliminateparticularbrandoftoiletshopfrom
thetoiletshopproductline,itisexampleofcontraction.

12. 3. DEEPENING PRODUCT MIX DEPTH:
Here,acompanywillnotaddnewproductlines,but
expandsoneormoreexcisingproductlines.Here,some
productlinesbecomefatfromthin.Forexample,Hindustan
UnileverLimitedofferingtenvarietiesinitseditableitems
decidestoaddfourmorevarieties.

13. 4. ALTERATION OR CHANGES IN EXISTING
PRODUCTS:
Insteadofdevelopingcompletelyanewproduct,marketer
mayimproveoneormoreestablishedproducts.
Improvementoralterationcanbemoreprofitableandless
riskycomparedtocompletelyanewproduct.Forexample,
MarutiUdyogLimiteddecidestoimprovefuelefficiencyof
existingmodels.Modificationisinformsofimprovementof
qualitiesorfeaturesorboth.

14. 5. DEVELOPING NEW USES OF EXISTING
PRODUCTS
Thisproductmixstrategyconcernswithfindingand
communicatingnewusesofproducts.Noattemptsare
madetodisturbproductlinesandproductitems.Itis
possibleintermsofmoreoccasions,morequantityata
time,ormorevariedusesofexistingproduct.Forexample,
CocaColamayconvincetouseitssoftdrinkalongwith
lunch.

15. 6. TRADING UP
Tradingupconsistsofaddingthehigh-price-prestige
productsinitsexistingproductline.Thenewproductis
intendedtostrengthentheprestigeandgoodwillofthe
company.Newprestigiousproductincreasespopularityof
companyandimprovesimageinthemindofcustomers.By
tradingupproductmixstrategy,demandofitscheapand
ordinaryproductscanbeencouraged.

16. 7. TRADING DOWN
Thetradingdownproductmixstrategyisquiteoppositetotrading
upstrategy.Acompanyproducingandsellingcostly,prestigious,
andpremiumqualityproductsdecidestoaddlower-priceditems
initscostlyandprestigiousproductlines.
Thosewhocannotaffordtheoriginalhigh-pricedproductscanbuy
lessexpensiveproductsofthesamecompany.Tradingdown
strategyleadstoattractprice-sensitivecustomers.Consumerscan
buythehighstatusproductsoffamouscompanyatalowprice.

17. 8. PRODUCT DIFFERENTIATION
Thisisauniqueproductmixstrategy.Thisstrategyinvolvesno
changeinprice,qualities,features,orvarieties.Inshort,products
arenotundergoneanychange.Productdifferentiationinvolves
establishingsuperiorityofproductsoverthecompetitors.
Byusingrigorousadvertising,effectivesalesmanship,strongsales
promotiontechniques,and/orpublicity,thecompanytriesto
convinceconsumersthatitsproductscanoffermorebenefits,
services,andsuperiorperformance.Companycancommunicatethe
peoplethedistinctbenefitsofitsproducts.