Product Mix

 Product mix is the full list of all the

products offered for sale by the company.
 Product Line is the line of items which
have same characteristics, customers
and/ or uses.
 Product Width- the no. of product lines
that a company offers
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PRODUCT MIX
DECISIONS
Product Modification
Decision
 Even if the company has 1 product, it will
sooner or later have to decide whether to
alter the product or discontinue
 Some products may have lost in the
competition due to technological
advancements etc
 Research is necessary to take up the
modification programme
Product Elimination
Decision
 Systematic and periodic process in which
products are evaluated with the purpose of
eliminating marginal offerings.
 When should the product be eliminated?
 To what other products will the freed up resources
be assigned and when?
 Should the current inventory be sold before
eliminating the product?
New Product Decisions

 The firm may have to take the decisions

of developing a new product because of
the following reasons
 Customer needs
 Environmental Opportunities
 Company’s internal strength to capitalize the
opportunities
Branding or Packaging
Decisions
 Branding- giving a product or service a
particular name for specific identity in the
customer’s mind.
 Packaging- designing a wrapper for a product
for the purpose of protection and attraction
 Both are effective marketing tools and lead to
consumer awareness, attraction and repeat
purchases.
Factors influencing
change in product mix
 Change in demand
 Demand may change because of change in
population, income, attitude etc
 Development of new product can take place
 Cost of Production
 Firm may think of adding new products to its
product line which can be easily
manufactured
 Competition:
- Competition also affects the product
mix when the mix comes with a new type
of product in the market, the following
firms also follow the leader in the same
manner by designing the product in the
same manner.
 Government Control and Policies:
- These also force a firm to change the
product mix.
 Use of Waste
 Sometimes use of waste and residual material also
can increase product mix.
 The product can be manufactured as by product
and it may bring down the cost of the main product.

 Distribution Factors
 A firm using a distribution channel may think of
utilizing its distribution resources.
 With this idea, the firm may expand its product
line. It will also reduce the distribution cost also.

 Marketer’s Image
 The desire to enhance the image and
goodwill may lead marketer to think to expand the
product line
 Company Objective
 To increase profits, to maximizing sales or
to enter into new market may be other
company’s objectives which may motivate the
company to add new products to its product line.
 The elimination of obsolete products from the
product line, simplification also bring about
changes in product line and product mix of the
company.
MAJOR PRODUCT LINE POLICIES AND
STRATEGIES
At the different point of time marketers adopt
different product line policies and strategies.

1.Expansion of Product Mix.

• A firm may decided to produce a new
product. It may be related or unrelated to the
present articles marketed by the firm.
• If it is related products, it is called as
expansion of product
• unrelated, it is called as diversification.
(a)To reduce the danger of declining demand
(b)To eliminate seasonal slumps
(c) To use extra production capacity
(d) To utilize profitably the byproducts of the
production process.
2. Contraction of Product Mix.
 It may be done by two ways.
 Elimination the product line
 and to reduce the number of items in the product mix.
 It is done because of the increased competition and the product
has reached to the maturity stage of the product life circle.
3. Alteration of Existing Product
 An alternative of developing a new product is improving an
established product.
 Glaxo has improved their product complan several times by
adding new flavors. Originally, they marketed plain complan.
Then they introduced complan with Banana, Cardamom,
chocolate and finally with ice cream flavors, thereby adding to
the price and earning more profits.
4.Developing of New Use for Existing Products:
 Many marketers develops new uses of existing products.
 For example Burnol which was first introduced for burns now
communicate it as an antiseptic, Amrutanjan which was
communicated as remedy for headache now being communicated as
the remedy for any type of ache.
5. Trading Up and Trading Down:
 Trading up and trading down are certain product strategies.
 When articles with comparatively high prices are added to the
existing products, it is called as trading up. The Maruti 800 Deluxe
cars and Premier Deluxe are the example. While a Maruti 800 car
costs Rs. 2,30,000. Maruti Deluxe costs about Rs. 2,55,000. Such
difference exist in the price of Premier Padmani and Premier Deluxe.
The manufacturer assumes that with the addition of high value
articles, the demand for the other will increase.
 The opposite of trading up is called trading down.
 When this technique is applied, the manufacturer adds low priced
items to its existing high priced articles.
6. Product Differentiation and Market
Segmentation:
 Product differentiation and market
segmentation are the other types of product
strategies which are interrelated.
Product Line Decisions
In developing product line strategies,
marketers face number of following tough
decisions on product line length and product
line featuring.:
(a) Product line length decision
(b) Product line stretching decision
(c) Product line filling decision
(d) Product line modernization decision
(e) Product line featuring decision
(a) Product line Length Decision-
• The product line length decision calls for
adding new brands to the product line and
subsequently eliminating the unprofitable
brands from the line.
• Product line length is influenced by company
objectives.
• The company must plan product line growth
by systematically increasing the length of its
product line by stretching its line and by
filling its line.
(a) Product Line Stretching Decision-
• Product line stretching occurs when a company lengthens its
product line beyond its current range by downward stretch,
upward stretch and combined stretch.
(i) Downward Stretch- Many companies initially locate at the
upper end of the market and later stretch their lines downward.
(ii) Upward Stretch- Companies at the lower end of the market
may enter the higher end as they may be attracted by a faster
growth rate or higher margins at the higher end or may simply
want to position themselves as full line manufacturers. For
example, Nirma launched first its detergent Nirma (yellow)
towards lower end and then launched Nirma super to cater the
needs of upper end.
• Upward stretch decision may be risky as the higher end
competitors may also strike back by entering the lower end of
the market.
(iii) Combined stretch- Companies at the middle slot of the market
may decide to stretch their lines in both directions.
 An upward stretching decision is an ideal position and
dream of many businesses. It’s because the businesses
usually start with lower-level product line stretching and
target the mass audience. When their business reaches
the maturity stage, they introduce premium level products.
 The goal of upward product line stretching is to grow and
earn more profit and that’s why they offer premium
products.
 Downward Stretch eg
 The smartphones of Samsung in Note and Edge are premium
level product and they’re very costly or premium price range. The
brand also offers smart phones of A-Series that are for the lower-
level market.

 Upward Stretch
 When Starbucks entered into the coffee business, there were
many brands selling coffee at the medium and lower level price
range. Starbucks started offering premium coffee at a premium
price range to target the rich market.
(c) Product Line filling Decision-
 A product line can be lengthened by adding
more items within the present range of the
line.
 Hindustan lever introduced Surf Excel in the
market in the same slot where Surf Ultra was
there. This strategy may be followed to earn
more profits, to satisfy dealers, to use the
excess capacity etc.
 But, however, if over line filling is done, it may
result in cannibalization and customer
confusion.
(d) Product Line Modernization Decision-
 In some cases product line length is adequate, but there is a need
to modernize it.
 For example HLL and Nirma has adequate line for their bath
soaps but time to time they modernize and modified the soap line
by adding different colours, shape, sizes to their product.
 An important aspect of product line modernization decision is that
it allows competitors to see changes and start redesigning their
own lines.
(e) Product Line Featuring Decision-
 Sometimes manager selects one or a few items in the line to
feature.
 They feature promotional models at the low end of the line to
serve as traffic builders.
Product mix of Tata
product line
Tata motors ( indica, harrier, trucks)
Tata food ( tata tea, tata salt, etc)
Tata services ( taj hotels)
Tata steels( steel bars, wire rods)
Tanishq( jewellery items)
Titan( digital , raga, sports)
Westside( apparels, men , women , children ,
footwear , cosmetics etc