PRODUCT MIX AND

PRODUCT LINE DECISIONS

Product Mix and Product Line

▪ The complete range of products present within a company is known as

the product mix. In any multi brand organizations, there are numerous products
present. None of the organizations wants to take the risk of being present in
the market with a single product.
▪ If a company has only a single product, than it is understood that the demand of
the product is very high or the company does not have the resources to expand
the number of products it has. Generally, most companies nowadays realise the
importance of product diversification.
▪ However, if the business market is any example, then all the top companies
have multiple products line. Coca cola, Apple, Microsoft, Nestle, Hindustan
unilever, Pharmaceutical companies, so on and so forth. These companies
need to have a wide product portfolio to be present in the market and to have
a sustainable business model.

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Product Mix of HUL

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Product Mix

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Product Mix, Product Line Depth and Length

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Product Mix Strategies

▪ Contraction of product mix

▪ Altering existing products
▪ Positioning the product
▪ Trading Up
▪ Trading down

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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

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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 edible items
decides to add four more varieties.

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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.

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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.

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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.

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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.

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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.

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Managing product lines

▪ Product Line analysis

▪ Product Line length (Line stretching and line filling)
▪ Product Line modernization
▪ Product Line pruning

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Product management in companies

▪ Product management is typically divided into three parts:

❑strategic product management,
❑ technical product management and
❑Go-To-Market (product marketing)
In addition to the three-part division, this model shows which tasks and steps
must be performed by product management in the course of a product cycle in
order to produce an innovative and profitable product.

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Strategic product management

▪ Strategic product management encompasses all strategic aspects and tasks

required to make an existing or future product successful.
▪ This includes, among other things, the information analysis, the development of
a concept as well as coordination and optimization measures. In technical
product management there is a similar approach.

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Market analysis

▪ The market analysis identifies existing market problems and trends.

▪ For the determination of market problems, the conducting of interviews with
customers as well as potentials (reports) has established itself, whereby existing
problems are specifically asked for. Market trends are determined by the
analysis of studies or with the help of market research.
▪ The results are checked by means of larger & regular surveys and that a market
problem only refers to one persona (“stereotype for a group of people with
concrete characteristics and concrete behavior") in a certain scenario.
▪ If several products/markets are involved, they can be structured according to
criteria such as market segments, product segments, functions, technologies or
regions and later be illustrated, for example, in a product-market matrix.
▪ Market segmentation is of particular importance; strategic product management
focuses on the target segments that have the greatest market potential and
require the lowest costs.

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Company analysis

▪ Both for the future market message and for improved communication with
customers, it is important to determine the attributes and added values that
differentiate the company from the competition in the long term: "If you can do
one thing best, you should do the one thing you can do". A competence analysis
forms the basis for this.
▪ A competitive analysis and a SWOT Analysis can provide further clarity. While
the competitive analysis reveals gaps, among other things, the portfolio, price
model, market message and communication analysis, the SWOT analysis
determines the company's position in a specific market. In addition, the analysis
can show what opportunities for further development and difficulties in
implementation exist.

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Technical product management

▪ Technical product management includes all aspects and tasks necessary to

design a functional physical new product

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Requirements rating

▪ At the beginning the requirements from the strategic product management must
be evaluated, which consist of the parts problem, persona and scenario. In
practice, the information is written for it on so-called "Story Cards". With the help
of an evaluation scheme with the criteria importance, number of reports and
priority, the requirements can be weighted and prioritized.
▪ The importance is based on the different customer types in the following
decreasing order: evaluating customer, potential customer, existing customer.
The priority can be calculated by multiplying the importance and the number of
reports. If required, the scheme can be supplemented with additional
information such as costs, usability or time expenditure

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Product development

▪ If the requirements are sufficiently prioritized, they can be bundled into work
packages and put in order; for this purpose the respective priorities are summed
up and an overall priority for a work package is calculated.
▪ Afterward, the time and costs required for the work packages must be estimated
for product development
▪ Then engineers devote themselves to the solution of the work packages, giving
the entire team information about their current status in regular status meetings
and modifying the schedule by possible delays.
▪ In order to check the functionality of a product solution or to reduce the risk of
undesirable developments, the creation of a pre-prototype and a prototype is
recommended.

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Product marketing

▪ The results from strategic product management serve as a prerequisite for a

successful product management (Go-To-Market). Product marketing is a
component of product management that is under the jurisdiction of a company's
product manager or product marketing manager.
▪ The product marketing manager is primarily responsible for the profitability of
the products, product launches, messaging, and all sales-supporting materials.
▪ Together with the communication team (press department) the plan for all
marketing activities and the communication channels has to be created.
▪ At the same time, measuring points (KPIs) need to be defined for reviewing the
success of the marketing measures and regularly present their evaluation.

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Product Marketing

▪ Product marketing is involved in strategic derivatives such as market strategies,

distribution strategies, positioning and communication strategies.
▪ Sales documents, presentations and tools from the results have to be created
while the sales channels need to be supported with the relevant market facts
from the strategic section so that their forecast is fact-based and more accurate.
▪ Through the contact with customers and non-customers the buyer persona
develops steadily and their buying criteria, channels, and problems can be
identified and optimized.
▪ The product marketing manager creates the positioning for all defined market
segments and enables the sales channels to deliver the persona-specific selling
points.

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Responsibilities within product marketing include:

• Product life cycle considerations

• Product differentiation
• Product naming and branding
• Product positioning and outbound messaging
• Promoting the product externally with press, customers, and partners
• Conducting customer feedback and enabling (pre-production, beta software)
• Launching new products to market
• Monitoring the competition

https://www.youtube.com/watch?v=yUOC-
Y0f5ZQ

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Product development

Product development is the process of building products that will be consumed or

used by others. Product managers often work collaboratively with engineers,
designers, and other stakeholders to accomplish tasks, such as:
• Testing products
• Identifying new product candidates
• Considering new candidates
• Gathering the voice of customers
• Defining product requirements
• Determining business-case and feasibility
• Scoping and defining new products at a high level
• Evangelizing new products within the company
• Building product roadmaps, particularly technology roadmaps
• Developing all products on schedule, working to a critical path
• Ensuring products are within optimal price margins and up to specifications
• Ensuring products are manufacturable and optimizing the cost of components
and procedures.

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Thank you
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