"The aim of marketing is to reduce the need for selling"

Effective marketers understand and communicate how a product or service

will meet the needs of a customer. Do this well, then customers won’t need to
be persuaded, and selling becomes easy.
With this a very good morning to one and all. Respected Pritam sir and my dear friends. Today aslam
Saikh, devashish Ranjan, isha desai and me astha Gupta are here to present our topic on product mix
strategies.

First of all what is product?

In general, a product is defined as a “thing produced by labor or effort” or the “result of an

act or a process. In marketing, a product is anything that can be offered to a market that
might satisfy a want or need. In retail, products are called merchandise. In manufacturing,
products are purchased as raw materials and sold as finished goods. Commodities are
usually raw materials such as metals and agricultural products, but the term can also refer to
anything widely available in the open market. In project management, products are the
formal definition of the project deliverables that form the objectives of the project.

A successful product mix strategy enables a company to focus efforts and

resources on the products and product lines within its offerings that have
the greatest potential for growth, market share, and revenue.

First, it’s important to note how the product line and the product mix
differ.

A product line refers to a product category or brand marketed by a

company. Products within a product line all perform a similar function,
offer similar benefits, target similar customers, are similarly priced, and
follow similar distribution channels. Important product line attributes
include line stretching, line filling, line modernization, and line featuring.

A product mix is the total number of product lines and individual

products or services offered by a company. Additionally referred to
as product assortment or product portfolio. Product mixes vary from
company to company. Some have multiple product lines with lots of
products in each line. But others are much more limited.

Dimensions of a Product Mix

#1 Width
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.

#2 Length

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 six.

#3 Depth

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 four.

#4 Consistency

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 is
synonymous with the product or service itself.

Illustration of a Product Mix

 
 

In the illustration above, the product mix shows a:

 Width of 3
 Length of 5
 Product Line 1 Depth of 2
 Product Line 2 Depth of 1
 Product Line 3 Depth of 2

The mix is considered consistent if the products in all the product lines
are similar.

Example of a Product Mix

Let us take a look at a simple product mix example of Coca-Cola. For

simplicity, assume that Coca-Cola oversees two product lines – soft
drinks and juice (Minute Maid). Products classified as soft drinks are
Coca-Cola, Fanta, Sprite, Diet Coke, Coke Zero, and products classified
as Minute Maid juice are Guava, Orange, Mango, and Mixed Fruit.

The product (mix) consistency of Coca-Cola would be high, as all

products within the product line fall under beverage. In addition,
production and distribution channels remain similar for each product.
The product mix of Coca-Cola in the simplified example would be
illustrated as follows:

Importance of a Product Mix

The product mix of a firm is crucial to understand as it exerts a

profound impact on a firm’s brand image. Maintaining high product
width and depth diversifies a firm’s product risk and reduces
dependence on one product or product line. With that being said,
unnecessary or non-value-adding product width diversification can hurt
a brand’s image. For example, if Apple were to expand its product line
to include refrigerators, it would likely have a negative impact on its
brand image with consumers.

In regard to a firm expanding its product mix:

 Expanding the width can provide a company with the ability to

satisfy the needs or demands of different consumers and
diversify risk.
 Expanding the depth can provide the ability to readdress and
better fulfill current consumers.

Marketing Strategies:

1. 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.

2. 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.

3. 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.
4. 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.

5. 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.

Over to alsam

6. 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

7. Trading Down

8. 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.

Using Road Map

Summary

Successfully expanding a product mix can help a business adjust to

changing consumer demand/preferences while reducing product risk
and reliance on a single product or product line. This, in turn, generates
substantial profits for the firm. On the other hand, poor product mix
expansion can result in a detrimental impact on a company’s brand
image and profitability.

Thank You Pritam Sir for giving us the opportunity to present on this topic.