Decisions on a productline level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. Nov 08, 2016 the product mix represents the collection of different products that a business offers its customers. What is a product line, and how should it be set up. A product line is a group of products that a company creates under a single brand. Hence, normally done by persons with experience with understanding of market oriented strategic planning. A product line can be also be lengthened by adding more items within the present range e. The example of nike product line includes, footwear, apparel and sports equipment and every product line have similar products what is product mix. Each of these product lines, in turn, consists of several sublines.
A companys product mix refers to the total number of products that are offered for sale. Any company that you take an example of, will have different product lines and within those product lines, there will be various products, the combination of which will give you the product mix of the company. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management. Sep 06, 2018 this is the basic explanation of how to analyse the product mix of any company. Therefore, the right product mix decisions should be taken, in line with customer needs. However, the product line is only one element of the much larger product mix. This line deals with the product mix decision on existing products and the flow of production is depicted in figure 1. Stretching the product line means taking it beyond the established positioning of the range of products. Every company deals with limited capacity, so smart decisions about product mix can greatly increase your profit. After getting a taste of success and with an availability of more resources, companies. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges. Length of the product mix refers to the total number of products in the mix. Capacity and product mix in cost accounting dummies. The product lines may range from one to many and the company may have many products under the same product line as well.
The basic product policy strategy issues at the product line level cluster around the following questions. Product line and product mix have direct relationship. Product mix decision making pmdm definition operations. The concept of product life cycle is also depicted using apt examples. That is if a company has 5 product lines and 10 products each under those product lines, the length of the mix will be 50 5 x 10. Oct 02, 2017 this is where the concept of product mix and product line decisions occur, this article clearly explains the differences between product mix and product line in a detailed manner along with examples.
Since customer needs may change rapidly, product mix decisions need to be taken more than once at the beginning product mix decisions are part of an ongoing process. Product definition a product service is the most important component of the marketing mix being the centre of focus as the offer to the market. A product line is a group of products that are closely related either because they satisfy a class of need, are used together, are sold to the same customer groups, are marketed through the same type of outlets or fall within given price ranges. The breadth of a product mix shows the different kinds of product lines that firm carries.
Decisions at the productmix level represent the highest order decisions made by the company constraining all the subsequent lower order decisions and identifying the busi ness that the company operates. The product mix represents the collection of different products that a business offers its customers. Product mix decision making pmdm a product mix is defined as the number of product lines that a company sells. This is where the concept of product mix and product line decisions occur, this article clearly explains the differences between product mix and product line in a detailed manner along with examples. This is the basic explanation of how to analyse the product mix of any company. The idea is to weed out lowprofit and unprofitable product items or product lines and earn higher profits from fewer products. The products are similar and focus on the same market sector. The product mix could include several lines of products or individual products that do not fall into a line. View notes ch 11 product mix and product line decisions. The company may have one or several product lines and each product.
The range of products offered by a firm is a critical strategic decision that will determine how the firm and their brands compete in the marketplace and the overall positioning of the brand. F a i r d e a l i n g s h o r t e x c e r p t reading. Product mix decisions the range of products offered by a firm is a critical strategic decision that will determine how the firm and their brands compete in the marketplace and the overall positioning of the brand. The product strategy calls for building a product line. A product line is too short if profits can be increased by adding items. For example, all the courses a university offers constitute its product mix, courses in the marketing department constitute a product line, and the principles of marketing course is a product item. The product mix sometimes called product assortment is made up of both product lines and individual products. In offering a product line, companies normally develop a basic platform and module that can be added to meet different customer requirements. Product line is a group of products that are closely related either because they satisfy a class of need, or used together, are sold to the same customer group, are marketed through the same types of outlets, or fall within given price ranges or that are considered. Stretching the product line the marketing study guide. The product mix includes both product lines and product items. Product mix decisions width, length, depth and consistency.
Eliminating existing products items from an established product line due to being obsolete, declining sales, and new product line direction. For example, consider a car company with two car product lines 3series and 5series. For example, consider a car company with two car product lines 3series and 5 series. What is meant by product line, length, breadth, consistency and depth. This equation is also known as product line length. The aim of this study is to determine the impact of the most used tools of sales promotion in retail sector such as. Given the existing product mix and the options available, the company must begin to take product decisions that are in line with longterm strategy and are consistent with that mix. Mar 14, 2020 the width of the product mix is equal to the number of product lines within a company. Product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line. Simply, it shows the number of items in the product line.
Product mix width, length, depth, consistency with examples. One of the decisions that they need to make when introducing new products to an existing product line is whether or not to stretch the length of their product line. Jun 25, 2018 the example of nike product line includes, footwear, apparel and sports equipment and every product line have similar products. Stretching the product line again if we use the apple example above, in the mobile phone market apple only offers smart phones of high quality. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Although more is becoming known about the relationships among elements of the marketing mix. Product mix decisions arise as soon as an organization has several product lines. Purchase decisions, marketing introduction retail market is growing in a high velocity environment all over the world. A product mix is whole selection of product lines you offer. Before proceeding towards the main topic product mix pricing strategies in marketing first you should be aware of this common marketing terms product mix or product portfolio. In cost accounting, product mix refers to the mix of products you produce. Jan 26, 2019 a product line is just a group of related products from a single manufacturer, like the cars on a dealers lot or the shampoos at your hairdresser. Both of these product line decisions involve adding items to the line.
All of these product lines when grouped together form the product mix of the company. A product line is a group of related products under a single brand sold by the same company. It can be argued that product decisions are probably the most crucial as the product is the very epitome of marketing planning. For instance, the product mix of colgate consists of three product lines. The product mix is described in terms or width and depth. Product characteristics and marketing strategy 19 the term marketing mix suggests a relationship between interacting, elements. Thereby, the company can serve both the upper and lower ends of the market. Product mix or product assortment is a set of total number of products lines that a seller offers in the market to its. Jul 23, 20 trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product. Product mix pricing strategies in marketing study lecture notes. The product mix constitutes all individual product items and product lines the company markets. Product line depth refers to the number of versions offered of each product in the line. Product mix is defined as the set of all products and items that a particular seller offers for sale.
Some companies have thousands of different products in their mix. Here i am mentioning three most common definitions of product mix. A good understanding of product mix is a key element of marketing management. Width is one of the ways marketers describe the extent of a companys product mix. Product mix planning is important aspect of companys overall strategy. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Expanding the product line is the second one of the product line decisions. Thus, the total number of products against the total number of product lines forms the length of the product mix. Jun 27, 2012 set of all product offered for sale by a company.
This is related to all the product mix and line decisions we have to take in a. You just need to work out the most profitable product mix. This enables an analysis of the constituency of the product mix to be made. For example, if a company owns a line of hygiene products and also owns a line of house cleaning products, all of those products together would constitute the product mix for the company. Decisions regarding the product, price, promotion and distribution channels are decisions on the elements of the marketing mix. If a company has 4 product lines, and 10 products within the product line, than the length of the product mix is 40. Yes, this sounds like a very general definition, but this is mostly because brand decisions definitely cover a lot of ground. Number of different product lines carries by the company. Product mix and product line understanding product length, width. Product mix contraction is achieved either by eliminating an entire product line or eliminating a few product items or brands from within a line. The depth of the product mix refers to the total number of products within a product line. Mar 04, 2016 marketing management notes product mix decisions product mix consists of various product lines that an organisation offers. A mathematical modeling approach to product line decisions glen.
The product mix, also called product portfolio, is the set of all product lines and items that a company offers for sale. Product positioning is a strategic management decision that determines the place a product should occupy in a given market its market niche. This dimension of the product mix represents the extent to which the activities of the firm are diversified. It offers the ability to expand your customer base by offering more products in more niches. The development of the term constituted a step forward in the classification of interrelated marketing efforts. The product mix of a company involves all of the products that a company has for sale. Source of image for our product mix decisions guide article. But what is a product mix, and what product mix decisions. Now, there are four dimensions associated with a companys product mix and the product line breadth is. Pdf product strategies of companies in the fmcg industry. Product line decisions, obviously, need to be made carefully.
For example product mix of bajaj company has more than 100 items in various product lines, such as fans, bulbs and tubes, heaters, motorbikes, shooters, richshow, processing machines, and many other ranges. Ch8 managing products, product lines, brands, packaging. Again if we use the apple example above, in the mobile phone market apple only offers smart phones of high quality. Product line decisions building a strong product line. Product mix or product assortment is a set of total number of products lines that a seller offers in the market to its buyers. Brand decisions, simply put, are decisions that one makes about a certain brand you are building or promoting. Product mix overview, dimensions and practical example. Apr 08, 2020 product mix, also known as product assortment, is the total number of product lines that a company offers to its customers. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important.
The length of a product mix refers to the total number of items in the mix. Product line group of products that are closely related because. Product mix decisions in marketing management tutorial. Relevant costs in product mix decision making seonmin kim. Product mix and product line understanding product. The product mix of a company is generally defined as the complete set of all products a business offers to a market.
Managing product line and product mix business market. Aug 30, 2019 product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing new variants of a brand to expand the business and to increase the profitability. With an understanding of the product mix, businesses can develop a strategy to reach their. Product mix, branding, packaging, labeling, warranties, customer service. Managing product line and product mix free download as powerpoint presentation. The impact of promotional tools on consumer buying. In the overall product mix decision, a firm needs to consider product line. Line filling means adding more items within the present range of the line. What is product mix width product mix refers to the full range of products a company makes. A product line is a group of closely related products with similar functions, customer groups, outlets and same price ranges. Product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing new variants of a brand to expand the business and to increase the profitability. Thus, product line width is a depiction of the number of product lines which a company has.
Understanding the basics of a product mix will help you understand why it is so important to your organization. Includes product line decisions along with their relative importance. A product mix is an important consideration for any firm. 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. Within each product line series are three types of cars. It refers to the total number of items in all the product lines in product mix. The astrocosmo problem considered earlier is an example. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. This is related to all the product mix and line decisions we have to take in a companys marketing department. The depth of a product mix refers to how many variants are offered of each product in the line. Product mix and product line understanding product length. The introduction of ballpoint pens could influence the perception the consumer has of the company as a whole.
The marketing mix established for one product may affect the sales of another product. Total number of items in the product mix of the company. For a company in the middle range of the market, stretching the product line in both directions may be best. An organisation may have just one product line in its product mix.
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