Q1. Explain the concept of "product mix" in detail. Also mention various product mix strategies.

What Is a Product Mix?

A product mix, also called a product assortment, represents the sum total of products that a company
sells. This includes new products, existing products, and variations of products (like smaller sizes for
kids). Each of these types of products counts toward the company’s complete product mix.

A company’s product mix impacts its distribution channels: the more types of products a company
offers, the greater its distribution needs. A large product mix also influences a company’s marketing mix:
the company may need a larger array of marketing channels to share its myriad product offerings with
disparate customer bases.

4 Dimensions of a Product Mix

You can visualize a company’s product mix by breaking it down into four dimensions: length, width,
depth, and consistency.

1.Product mix width: Product width, also called product breadth, refers to the total number of product
lines sold from a given company. For instance, a car company may offers multiple automobile product
lines.

2.Product mix length: Product mix length describes the total number of products that a company offers.
If a business has five product lines and six products per line, it has a product length of thirty.

3.Product mix depth: Depth speaks to the variety within a single product line. This can manifest as
various sizes, flavors, and colors. For example, within a toothbrush line and within that product line, a
company might offer different head sizes, bristle consistency, colors, and special features.

4.Product mix consistency: A brand’s product consistency describes how similar brand offerings are to
one another. The consistency of product lines at a book publisher, where all products are bound
volumes of text, will be quite different from the consistency of product lines at a home goods store,
where products can range from handheld trinkets to massive pieces of furniture.

Product Mix Marketing Strategies

When a company offers multiple product categories and sells at different price points, it must design a
marketing strategy that reaches many different types of customers. Here are three marketing strategies
that companies use to adequately advertise their product mix.

1. Varied prices: Companies offer products at different price points, and these price points correspond
with varying levels of quality. This pricing strategy helps a company stand out in highly competitive
product markets. For example, a razor company may offer a number of variations on its core product,
each with its own price point. It may offer single-use razors at a low price while selling more durable
variants (like razors that can last for weeks or months) at a higher price point. These razors can both be
successful products because the company steers them toward different target audiences. By offering
two different product lines that perform the same core function, the razor company meets consumer
demand from different sectors of the market.

2. Varied product types: Businesses sell similar products at the same price in order to appeal to
customer preferences. For example, a toothpaste company may offer spearmint toothpaste, cinnamon
toothpaste, and fruit-flavored toothpaste for the very same price. All of these toothpaste varieties
contain the same active ingredients, but the different flavors draw different customers. What’s more, by
offering different flavors, the toothpaste company can cultivate a brand identity that communicates
responsiveness to their customers’ tastes.

3. Varied product lines: A company can expand its product mix by offering multiple products that have
their own brand identity and marketing message. A beverage company might exemplify this strategy in
its soft drink offerings. The company’s beverages each have distinct labels, brand image, and marketing
campaigns. By investing in each of these product lines, the company can claim a greater market share in
its core soft drink sector.

Examples of a Product Mix Strategy

A smart product mix strategy can help a company’s product lines penetrate new markets. Through a mix
of product line pricing, differentiation, and marketing, a company can disrupt an existing market and
usurp brand-name legacy products. The following examples demonstrate how a product mix strategy
manifests in the real world of business.

1. Televisions: When shopping for a new television, you know you need a TV that can fit in a particular
space and meets or exceeds a particular image quality. A television company offers TVs in many sizes
with many levels of screen resolution, all at different price points. If the TV company’s product mix
overlaps with your needs as a customer, the company might win your business.

2. Suits: You need a suit for an upcoming formal occasion, and you head to a department store that
offers multiple brands. You notice a particular company sells many suit varieties at a wide array of price
points. All of these product items have a similar function. Yet the sheer variety of products may help the
brand appeal to a greater number of customers—including you.

Q2.Physical distribution "is a network of blood vessel which is necessary for existence for an
Organization". Explain the above statement.

Definition.

In today;s global market place, selling a product is sometimes easier thangetting it to customers.
/ompanies has to decide on the best way to store,handle, and move their products and services so
that they are available tocustomers in the right assortment, at the right time, and in the right
place.Physical distribution has a major impact on both customers satisfaction and company cost.

Physical distribution is the group of activities associated with the supply of finished product from the
production line to the consumers. The physical distribution considers many sales distribution channels,
such as wholesale and retail, and includes critical decision areas like customer service, inventory,
materials, packaging, order processing, and transportation and logistics. You often will hear these
processes be referred to as distribution, which is used to describe the marketing and movement of
products.

Physical distribution plays an important role in supply chain management. There are several benefits to
investing in a physical distribution system, including increased sales, faster shipping, lower costs, and
price stability.

1. Increased sales

Businesses can increase customer satisfaction and sales by using a physical distribution system that ships
products faster and more economically. That’s why regionalization remains a top priority for many
companies. Almost 90% say they plan to work with regional suppliers and distributors over the next
three years. The ability to store products in convenient places and move them efficiently is the key to
retailers' continued success in an increasingly competitive global market.

2.Faster shipping

The biggest benefit of investing in distribution is faster shipping times. Nearly half (48%) of shoppers say
they normally receive packages within 2 and 3 days, and 42% receive them within 4 to 7 days.
Consumers expect faster shipping from all retailers. “Investing in a physical distribution system is the
most surefire way to shorten shipping times and keep customers happy. This works by strategically
storing items in several locations all over the country,” says Dan Potter, Head of Digital at CRAFTD, a
premium jewelry brand based out of London.

3.Reduced costs
Another benefit of optimizing distribution is reduced supply chain costs. Areas in which you can save
include:

Transportation: Using a physical distribution system can speed up and improve your shipping processes.
As a result, you won't have to pay extra for shipping or storage.

Inventory: You can better balance inventory and meet demand, which leads to savings on storage fees
from holding excess inventory.

Warehousing: Efficiently moving products leads to lower warehousing costs, since you won’t have to pay
for extra storage space.

4.Supports price stabilization

Another major benefit of physical distribution is price stabilization. Implementing a system that can
deliver products efficiently and quickly can prevent price spikes when demand is high and supplies are
low. With a physical distribution system in place, you can fulfill products even when there is high
demand, which keeps prices stable. It also helps you avoid marketing up prices to cover unforeseen
handling and shipping costs.

Q3. Explain factors affecting pricing decisions in an organization.

The influencing factors for a price decision can be divided into two groups:(A) Internal Factors and(B)
External Factors.

(A) Internal Factors

1. Organisational Factors:Pricing decisions occur on two levels in the organisation. Over-all price strategy
is dealt with by top executives. They determine the basic ranges that the product falls into in terms
ofmarket segments. The actual mechanics of pricing are dealt with at lower levels in the firmand focus
on individual product strategies. Usually, some combination of production andmarketing specialists are
involved in choosing the price.

2. Marketing Mix:Marketing experts view price as only one of the many important elements of the
marketingmix. A shift in any one of the elements has an immediate effect on the other three—
Production, Promotion and Distribution. In some industries, a firm may use price reduction asa
marketing technique.Other firms may raise prices as a deliberate strategy to build a high-prestige
product line. Ineither case, the effort will not succeed unless the price change is combined with a
totalmarketing strategy that supports it. A firm that raises its prices may add a more impressivelooking
package and may begin a new advertising campaign.

3. Product Differentiation:The price of the product also depends upon the characteristics of the product.
In order toattract the customers, different characteristics are added to the product, such as quality,
size,colour, attractive package, alternative uses etc. Generally, customers pay more prices for the
product which is of the new style, fashion, better package etc
4. Cost of the Product:Cost and price of a product are closely related. The most important factor is the
cost of production. In deciding to market a product, a firm may try to decide what prices are
realistic,considering current demand and competition in the market. The product ultimately goes tothe
public and their capacity to pay will fix the cost, otherwise product would be flapped inthe market.

5. Objectives of the Firm:A firm may have various objectives and pricing contributes its share in
achieving such goals.Firms may pursue a variety of value-oriented objectives, such as maximizing sales
revenue,maximizing market share, maximizing customer volume, minimizing customer
volume,maintaining an image, maintaining stable price etc. Pricing policy should be established onlyafter
proper considerations of the objectives of the Firm.

(B) External Factors:

1. Demand:The market demand for a product or service obviously has a big impact on pricing.
Sincedemand is affected by factors like, number and size of competitors, the prospective buyers,their
capacity and willingness to pay, their preference etc. are taken into account while fixingthe price.A firm
can determine the expected price in a few test-markets by trying different prices indifferent markets and
comparing the results with a controlled market in which price is notaltered. If the demand of the
product is inelastic, high prices may be fixed. On the other hand,if demand is elastic, the firm should not
fix high prices, rather it should fix lower prices than that of the competitors

2.Competition:Competitive conditions affect the pricing decisions. Competition is a crucial factor in

pricedetermination. A firm can fix the price equal to or lower than that of the competitors, provided the
quality of product, in no case, be lower than that of the competitors

3. Suppliers:Suppliers of raw materials and other goods can have a significant effect on the price of a
product. If the price of cotton goes up, the increase is passed on by suppliers tomanufacturers.
Manufacturers, in turn, pass it on to consumers.Sometimes, however, when a manufacturer appears to
be making large profits on a particular product, suppliers will attempt to make profits by charging more
for their supplies. In otherwords, the price of a finished product is intimately linked up with the price of
the rawmaterials. Scarcity or abundance of the raw materials also determines pricing

4.. Economic Conditions:

Economic Conditions:The inflationary or deflationary tendency affects pricing. In recession period, the
prices arereduced to a sizeable extent to maintain the level of turnover. On the other hand, the
pricesare increased in boom period to cover the increasing cost of production and distribution. To meet
the changes in demand, price etc

5.Government:
Price discretion is also affected by the price-control by the government through enactment oflegislation,
when it is thought proper to arrest the inflationary trend in prices of certain products. The prices cannot
be fixed higher, as government keeps a close watch on pricing inthe private sector. The marketers
obviously can exercise substantial control over the internalfactors,while they have little, if any ,control
over the external ones.

Q4. Enumerate and explain importance of various techniques of sales promotion .

An Introduction to Sales Promotion Techniques

Even if customer happiness has risen to the top of firms’ priorities, there seem to be instances when
they must spur demand and boost short-term product sales. Here, sales advertising becomes important.

Sales promotion techniques are a component of the overall promotional strategy where the company
employs a variety of short-term customer-focused tactics to increase the perceived value and/or appeal
of the product to increase demand.

Techniques Of Sales Promotion

1.Free shipping: Customers frequently abandon your site without purchasing due to pricey delivery
alternatives. You may conduct a time-limited promotion that offers these potential customers free
purchases in exchange for a minimum purchase quantity to bring them back.

2.Seasonal sales: People frequently purchase air conditioners and ski gear in the summer to save money.
It might be quite difficult to sell things during the off-season; thus, we strongly advise you to offer
seasonal deals. Offer discounted rates on goods from previous collections, and also don’t hesitate to
promote your promotion on social media and via email.

3.Limited-time offers: This tactic is much more effective than a significant discount. Marketers use this
tactic to generate a sense of desperation and apprehension about losing out on their goods. Customers
can have 24 hours to take advantage of this deal.

4.Holiday promotions: Valentine’s Day, Republic Day sales, Diwali sales, Christmas sales, and Diwali sales
are all excellent opportunities to increase sales. When purchasing gifts for your friends and relatives,
people are incredibly giving. Launch your Christmas promotions early and spend money on emails, Seo,
social networking sites, and other advertising avenues.

5.Contests: These are a fantastic way to enhance user engagement, brand exposure, and revenue. You
might ask your audience to come up with a new motto for your company, an ad campaign, a design, or
innovative ways to utilize your product.

6.Reward points: It’s important to reward loyal customers since consumers like companies that respect
their preferences. Therefore, you may begin developing client loyalty using this method. Each customer
who tends to make a future purchase or invests a specific amount of money should receive points. Allow
them to redeem those credits for goods later.

7.Flash sales: These incredibly brief promotions provide steep reductions for a constrained period of
time. These sales generate a sense of necessity and urgency surrounding your purchase.

8. Free trials or demonstrations are among the most popular sales campaigns and among the most
effective ways to expand a clientele. Businesses can provide a first-time customer with a limited supply
of the goods or a limited period with the product for free to see whether they enjoy it.

Importance Of Sales Promotion Techniques Are:

1.New leads are produced as a result of sales promotions. Since sales promotion stimulates information
exchange among social networks linked to your business, it can improve the image of your goods.
People interested in playing football will spread the word if you provide training sports shoes.

2.Allows you to re-engage with your current audience. A user who has signed up for an email newsletter
from a brand will frequently get sales promos. It is a method of maintaining the audience’s interest and
a tight relationship with the business, which is essential for fostering loyalty.

3.Increased revenue. Even if they must cut the price to do so, sales promotions aid businesses in
growing the volume of items sold. Of course, simply lowering the cost is insufficient; customers must
actually need your goods; the reduction is merely an additional incentive.

4.Increases awareness of a brand. Because consumers are more inclined to talk about just a firm that
offers advantages and saves them money, sales marketing is a technique to establish your brand.

Reference

A.B Akpan (2003): Introduction to marketing 1st Edition, published by Isola Ola and sons ,Zarin.

Ayuba Bello(2003): Marketing principles and management, 2nd edition ,Shukrah Kaduna.