Professional Documents
Culture Documents
Product Mix Strategies
Product Mix Strategies
Breadth - the number of product lines carried. Depth - the variety of sizes, colours, and . models offered within each product line.
y
A product line is a broad group of products, intended for similar uses and having similar characteristics.
10 2
Various sizes and prices in redwood or Each in various Each in various aluminium with sizes and prices sizes and prices plastic webbing
10 3
10 4
ProductProduct-Mix Contraction:
Eliminate an entire line or reduce assortment within it. Pruning to reduce similar brands. Dump unprofitable or indistinct brands.
10 7
y y
the concept of the product life cycle applies to product categories, not to brands; it is related to the concept of diffusion of innovation different products will have differently-shaped life cycle curves; will diffuse at different rates a product is normally perceived to pass through four stages over its life cycle; introduction, growth, maturity, and decline each stage requires different marketing strategies
10 8
10 9
Profit 0 Loss
Time in years
10 10
creating awareness, reaching the innovators y growth stage: competition begins, sales grow quickly, profits peak, market penetration y maturity stage: competition is intense, sales slow down, differentiated product offerings, customers are brand loyal, few new entrants y decline stage: customers move to other options, competitors leave, profits are low, consider exit
10 11
length of the life cycle will vary across markets; some are quite short and may be getting shorter some fads have very short life cycles, while other products stay at maturity for years in high-tech markets, life cycles are very short some products do not make it through all four stages; they may fail in introduction the life cycle must be considered in relation to a specific market; stage may vary across markets
10 12
Time in years
Time in years
Aggregate sales
Time in years
10 14
FashionFashion-Adoption Process
y y
Series of buying waves as a given style is popularly accepted by one group after another. Three theories of fashion adoption: Trickle-downa given fashion flows down Trickle-down through several socioeconomic levels. Trickle-acrossthe fashion moves horizontally Trickle-across and simultaneously within several socioeconomic levels. Trickle-upa style first becomes popular at Trickle-up lower levels and then flows upward.
10 16
TRICKLE-ACROSS
TRICKLEUP
Product adopted first by lower socioeconomic group
10 17
TRICKLEDOWN
TRICKLE-ACROSS
Discount stores