What is product mix?
Product mix or product assortment refers to the number of product lines that an organisation offers to its customers.
Product line is a group of related products manufactured
or marketed by a single company. Such products function in similar manner, sold
to the same customer group, sold through the same type of outlets, and fall
within a same price range.
Product mix, also
known as product assortment or product portfolio, refers to the complete set of
products and/or services offered by a firm. A product mix consists of product
lines, which are associated items that consumers tend to use together or
think of as similar products or services.
Every
organization has a product mix that is made up of product lines. The variety of
products that a company produces, or that a retailer stocks is known as ‘product line’. It is a broad group of
products, intended for similar uses and having similar characteristics. The
product mix is the set of all the products offered for sale by a company.
Product mix
consists of various product lines that an organisation offers, an organisation
may have just one product line in its product mix and it may also have multiple
product lines. These product lines may be fairly similar or totally different,
for example - Dish washing detergent
liquid and Powder are two similar product lines, both are used
for cleaning and based on same technology;
whereas Deodorants and Laundry are totally different
product lines.
An
organisation's product mix has following four dimensions: -
1.
Width,
2.
Length,
3.
Depth, and
4.
Consistency.
The width of
an organisation's product mix pertains to the number of product lines that the organisation
is offering. For example, Hindustan Uni Lever offers wide width of
its home care, personal care and beverage products. Width of HUL product mix
includes Personal wash, Laundry, Skin care, Hair care, Oral care, Deodorants,
Tea, and Coffee.
Width, also
known as breadth, refers to the number of product lines offered by a company.
For example, Kellogg’s product
lines consist of: (1) Ready-to-eat cereal, (2) Pastries and breakfast snacks,
(3) Crackers and cookies, and (4) Frozen / Organic / Natural goods.
Length
The
length of an organisation's product mix pertains to the total number of
products or items in the product mix.
Length refers
to the total number of products in a firm’s product mix. For example, consider
a car company with two car product lines (3-series and 5-series). Within each
product line series are three types of cars. In this example, the product
length of the company would be 3 x 2 = 6.
Depth
The depth
of an organisation's product mix pertains to the total number of variants of
each product offered in the line. Variants includes size, colour, flavours, and
other distinguishing characteristics. For example, Close-up, brand
of HUL is available in three formations and in three sizes. Hence, the depth of
Close-up brand is 3*3 = 9.
Depth refers
to the number of variations within a product line. For example, continuing with
the car company example above, a 3-series product line may offer several
variations such as coupe, sedan, truck, and convertible. In such a case, the
depth of the 3-series product line would be 4.
Consistency
The
consistency of an organisation's product mix refers to how closely related the
various product lines are in use, production, distribution, or in any other
manner.
Consistency
refers to how closely related product lines are to each other. It is in
reference to their use, production, and distribution
channels. The
consistency of a product mix is advantageous for firms attempting to position
themselves as a niche producer or distributor. In addition, consistency aids
with ensuring a firm’s brand image are synonymous with the product or service
itself.
The basic components of product mix are:
(i) Services
(ii) Packaging
(iii) Brand
(iv) Product
Item and
(v) Product
line
The various product
mix strategies are:
(i) Launching
new products from time to time
(ii)
Alteration of Existing Products
(iii) Eliminate
an entire line or reduce assortment within it
(iv) Trading
Up
(v) Trading
Down
(vi) Product
life cycle management
The retail product mix is device so as to
develop an appropriate promotion strategy for the store depending on the target
market to be reached. Once the target market is identified and positioning
strategy defined, the retailers employ various tools of product mix to reach
out to consumers. These efforts also aim at building store image.
Retailers
usually employ a combination of various elements of product mix to achieve
promotional and business objectives. The degree and the nature of usage of each
of the promotion methods depend on the objectives of the retail firm, product,
market profile, and availability of resources.
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