Product Mix
The Product Mix also called as Product Assortment, refers to the complete range of products that is offered for sale by the company. In other words, the number of product lines that a company has for its customers is called as product mix.
Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products. Your product lines may be fairly similar, such as dish washing liquid and bar soap, which are both used for cleaning and use similar technologies. Or your product lines may be vastly different, such as cake and razors.
The Product Line refers to the list of all the related products manufactured or marketed by a single firm. The number of products within the product line are called as the items, and these might be similar in terms of technology used, channel employed, customer’s needs and preferences or any other aspect.
Product mix
As explained, product mix is a combination of total product lines within a company. A company like HUL has numerous product lines like Shampoos, detergents, Soaps etc. The combination of all these product lines is the product mix.
Product line
The product line is a subset of the product mix. The product line generally refers to a type of product within an organization. As the organization can have a number of different types of products, it will have similar number of product lines. Thus, in Nestle, there are milk based products like milkmaid, Food products like Maggi, chocolate products like Kitkat and other such product lines. Thus, Nestle’s product mix will be a combination of the all the product lines within the company.
Product line length
If a company has 4 product lines, and 10 products within the product line, than the length of the product mix is 40. Thus, the total number of products against the total number of product lines forms the length of the product mix. This equation is also known as product line length.
Product line width
The width of the product mix is equal to the number of product lines within a company. Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. Thus, product line width is a depiction of the number of product lines which a company has.
Product line depth
It is fairly easy to understand what depth of the product mix will mean. Where length and width were a function of the number of product lines, the depth of the product mix is the total number of products within a product line. Thus if a company has 4 product lines and 10 products in each product line, than the product mix depth is 10. It can have any variations within the product for form the product line depth.
Product line consistency
The lesser the variations between the products, the more is the product line consistency. For example, Amul has various product lines which are all dairy related. So that product mix consistency is high. But Samsung as a company has many product lines which are completely independent of each other. Like Air conditioners, televisions, smart phones, home appliances, so on and so forth. Thus the product mix consistency is low in Samsung.
Example of Product line and Product mix
Let us take an example of P&G as a company and understand product mix. This will be not be a precise example and all products of P&G might not be taken into consideration.
But the example will help you understand product mix within an organization.
Detergents – Arial, Arial oxyblue, Ariel bar, Tide, Tide naturals, Tide bleach, Tide plus.
Shampoos – Head and shoulders, Head and shoulders anti dandruff, Pantene, Pantene damage repair, Pantene pro-v
In the above example the following can be learned about the product mix of P&G
Product mix Length – 12
Product mix Width – 2
Product mix Depth – 7 in detergents and 5 in shampoos
Product mix consistency – High as both are bathroom products.
Product Mix Strategies
The major product mix strategies (given by William Stanton and others) have been discussed briefly as under:
- Expansion of Product Mix
Expansion of product mix implies increasing the number of product lines. New lines may be related or unrelated to the present products. For example, Bajaj Company adds car (unrelated expansion) in its product mix or may add new varieties in two wheelers and three wheelers. When company finds it difficult to stand in market with existing product lines, it may decide to expand its product mix.
For example, Hindustan Unilever Limited has various products in its product mix such as:
- Toilet soaps, detergent cakes, washing powders, etc.
- Cosmetic products,
- Edible items,
- Shaving creams and blades,
- Pesticides, etc.
If company adds soft drink as a new product line, it is the example of expansion of product mix.
- Contraction of Product Mix
Sometimes, a company contracts its product mix. Contraction consists of dropping or eliminating one or more product lines or product items. Here, fat product lines are made thin. Some models or varieties, which are not profitable, are eliminated. This strategy results into more profits from fewer products. If Hindustan Unilever Limited decides to eliminate particular brand of toilet shop from the toilet shop product line, it is example of contraction.
- Deepening Product Mix Depth
Here, a company will not add new product lines, but expands one or more excising product lines. Here, some product lines become fat from thin. For example, Hindustan Unilever Limited offering ten varieties in its editable items decides to add four more varieties.
- Alteration or Changes in Existing Products
Instead of developing completely a new product, marketer may improve one or more established products. Improvement or alteration can be more profitable and less risky compared to completely a new product. For example, Maruti Udyog Limited decides to improve fuel efficiency of existing models. Modification is in forms of improvement of qualities or features or both.
- Developing New Uses of Existing Products
This product mix strategy concerns with finding and communicating new uses of products. No attempts are made to disturb product lines and product items. It is possible in terms of more occasions, more quantity at a time, or more varied uses of existing product. For example, Coca Cola may convince to use its soft drink along with lunch.
- Trading Up
Trading up consists of adding the high-price-prestige products in its existing product line. The new product is intended to strengthen the prestige and goodwill of the company. New prestigious product increases popularity of company and improves image in the mind of customers. By trading up product mix strategy, demand of its cheap and ordinary products can be encouraged.
- Trading Down
The trading down product mix strategy is quite opposite to trading up strategy. A company producing and selling costly, prestigious, and premium quality products decides to add lower- priced items in its costly and prestigious product lines.
Those who cannot afford the original high-priced products can buy less expensive products of the same company. Trading down strategy leads to attract price-sensitive customers. Consumers can buy the high status products of famous company at a low price.
- Product Differentiation
This is a unique product mix strategy. This strategy involves no change in price, qualities, features, or varieties. In short, products are not undergone any change. Product differentiation involves establishing superiority of products over the competitors.
By using rigorous advertising, effective salesmanship, strong sales promotion techniques, and/or publicity, the company tries to convince consumers that its products can offer more benefits, services, and superior performance. Company can communicate the people the distinct benefits of its products.