Many companies start as a single product item or product line business. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management a product is any offering to the market for attention, acquisition, use or consumption that might satisfy a need. Positioning refers to peoples perceptions of a brand, an individual product or a product mix. Number of different product lines carries by the company. Product line decisions are difficult because the prod. Trading down introducing a low priced product to the prestigious line so as to cater increased demand. The product mix constitutes all individual product items and product lines the company markets. Four important dimensions of a product mix can be identified. Trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product. In modeling productmix linear programming lp problems, a common assumption is that fixed costs will not change for decisions made within a relevant range in which revenues and costs are linear. Product line analysis is part of product line development. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. Product line pricing is a product pricing strategy, used when a company has more than one product in a product line.
Product definition a productservice is the most important component of the marketing mix being the centre of focus as the offer to the market. Product marketing in a business addresses five important strategic questions. Their product mix includes roasted and handcrafted high. Starbucks corporation, an american company founded in 1971 in seattle, wa, is a premier roaster, marketer and retailer of specialty coffee around world. Thus, product line width is a depiction of the number of product lines which a company has. Product mix and product line decisions the complete set of all products and services offered by a firm is called its product mix. A company like hul has numerous product lines like shampoos, detergents, soaps etc. Once you clearly understand opportunities through data analysis and have performed the appropriate strategic mix planning, pass the baton to the sales team, they can take your insights to drive richer product mix and improve the companys bottom line.
High market share firms aggressively expand their product lines, as do firms with. The product mix is made up of both product lines and individual products. A product mix is a group of everything a company sells. For example, patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc. Consisting of the full array of a firms marketplace offerings, the mix is designed in terms of width, depth, positioning and. Product decisions at these three levels are generally of two types. This dimension of the product mix represents the extent to which the activities of the firm are diversified. A product line is too short if profits can be increased by adding items. A diagrammatic explanation of the product mix by taking microsoft. Having a broad productmix also spreads the risk of failure over a great number of product lines. Developing a product or service involves defining the benefits that it will offer. This paper explaines that setup costs have some implications to consider in the product mix decisions.
In modem times on producer or distributor or retailer deals in a single product. The depth of the product mix refers to the total number of products within a product line. Width of the product mix is measured by the number and variety of product lines offered by a firm. How a product mix can be used to enhance the value of a. Length of the product mix refers to the total number of products in the mix. Product management lesson 2 product line decisions and. Product definition a product service is the most important component of the marketing mix being the centre of focus as the offer to the market.
An organizations value can be enhanced by continually improving how it meets the needs and wants of its customers. A product mix is whole selection of product lines you offer. The length of a product mix refers to the total number of items in the mix. Product mix decisions width, length, depth and consistency.
That is if a company has 5 product lines and 10 products each under those product lines, the length of the mix will be 50 5 x 10. Pdf abstract despite the importance of product line management as a. Product mix of a company is made of all product lines and items. The differential amount column in panel c of figure 7. It shows the degree of diversification of a firms activities. Quality is one of the marketers major positioning tools. The product line length can be influenced by company objectives and resources. In addressing this objective, the effectiveness of the integrated model will be evaluated under the artificial production line. Set of all products items that a part sellers offers for sale to buyers. Nov 04, 2012 the product mix is the collection of products lines and individual products that a business offers. The introduction of ballpoint pens could influence the perception the consumer has of the company as a whole. Line filling adding a new product within the current range of an incomplete line. So, product diversification means addition of a new product not the variations in the qualities of the same product to the existing. An individual product in a line is known as a product item.
On the other hand a company may have number of product lines each of which may then have a number of products indicating width. Product mix and product line understanding product. The restaurant had experienced success with chicken mcnuggets and the egg mcmuffin earlier as nonhamburger and fries menu additions and. The breadth of a product mix shows the different kinds of product lines that firm carries. It is a process that traders adopt to separate products in the same category into various price groups, to create different quality levels in the customers minds. The product mix could include several lines of products or individual products that do not fall into a line. The basic product policy strategy issues at the product line level cluster around the following questions. An abbreviated version of bmws prod uct mix appears in exhibit 11. After getting a taste of success and with an availability of more resources, companies decide to expand their product line andor introduce newer product lines in consonance with market opportunities or in response to competitors moves. Product mix product mix denotes product development, packaging, branding, and research. Product line decisions building a strong product line. Simply, it shows the number of items in the product line. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges.
Product line depthtotal number of items under each brand in the line in terms of variants, shades, models, pack sizes. Product mix depth refers to the variants broadness and narrowness of a product in product line. Expanding the product line is the second one of the product line decisions. The goods or services that a company produces must be with regard to the needs and the wants of the consumers and the company must be clear if they are providing what the consumers want from them the chartered institute of. The product mix is the collection of products lines and individual products that a business offers. A product mix is defined as the number of product lines that a company sells. Belongs to a single manufacturer shares similar attributes serves the common general purpose but. Managing product, product lines, brands, packaging 5 companys decision making on product relates to. Product line breadth refers to how many or how broad is the range of products offered by the firm. A good understanding of product mix is a key element of marketing management. It includes the total number of varieties or models offered by the company. It refers to the total number of items in all the product lines in product mix. Product mix decision notes product mix decision product mix. Jan 26, 2019 a product line is just a group of related products from a single manufacturer, like the cars on a dealers lot or the shampoos at your hairdresser.
The astrocosmo problem considered earlier is an example. Product mix and product line understanding product length. Line filling means adding more items within the present range of the line. Product mix a companys assortment of product lines and individual offerings product mix widththe number of product lines offered. A product line is that combination of products which. Product mix decision making refers to the decision. Consequently, lp is commonly used to solve for an optimal mix of products that maximizes contribution margin i. Product mix consistency refers to the closeness of different product lines basis end use, production, promotion, distribution, etc. Product mix length is the total number of items in the mix. For example product mix of bajaj company has more than 100 items in various product lines, such as fans, bulbs and tubes, heaters, motorbikes, shooters, richshow, processing machines, and many other ranges. These benefits are communicated to and delivered by product attributes such as quality, features, style and design. As explained, product mix is a combination of total product lines within a company. Ch8 managing products, product lines, brands, packaging. Decisions on a productline level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix.
Product line product line refers to a group of products that function in a similar manner, sold to the same customer groups via same distribution channels and fall within the same price range product mix product mix is the entire collection or assortment of products or product lines offered by an organisation product line is a group of products that are related to each other in. Pdf consumer preferences and productline pricing strategies. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management. Product mix decisions in marketing management tutorial 08 may. A product line is a group of products that are closely related either because they satisfy a class of need, are used together, are sold to the same customer groups, are marketed through the same type of outlets or fall within given price ranges. Managing product line and product mix business market. Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. This enables an analysis of the constituency of the product mix to be made. This paper explaines that setup costs have some implications. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important. Each of these product lines is intended to attract a specific customer. Philosophy that makes considerable sense when one views the rapidity with which a single productline can become outmodel or obsolescent and hence unprofitable. A mathematical modeling approach to product line decisions glen.
Product line decision product line managers takes product line decisions considering the sales. Allocated fixed costs fixed costs that cannot be traced directly to a product line or customer, and therefore are assigned to product lines or customers using an allocation process. The first of the product mix decisions refers to the product mix width. Abc and the toc is required for the proper modeling of the product mix decisions. The combination of all these product lines is the product mix. The concept of product life cycle is also depicted using apt examples. For instance, a company might want to maintain longer product lines to protect against economic swings. Product mix the perfect product must provide value for a customer the chartered institute of marketing, 2009, p. Product mix is defined as the set of all products and items that a particular seller offers for sale.
A product mix is the set of all product lines and items that a particular seller offers for the. Individual product decisionprinciples of marketing read. Product mix decisions in marketing management tutorial 08. The complete set of all products a business offers to a market. The product mix of a company involves all of the products that a company has for sale. In the overall product mix decision, a firm needs to consider product line.
The product mix is described in terms or width and depth. Product line and product mix have direct relationship. The market can be developed by creating a good productrange and introducing it to the market productorientated approach or by finding a gap in the market and developing a product to fill it marketorientated approach. This is an application of the, dont put all your eggs in one basket. Relevant costs in product mix decision making seonmin kim. Product mix has three important aspectswidth, depth and consistency. Both of these product line decisions involve adding items to the line. For managers, that comes down to making decisions about which product lines to carry, and how to put them together to make a winning product mix. Diversifies risk and capitalizes on established reputations. The width of a product mix refers to how many different product lines the company carries. Product line depth refers to the number of versions offered of each product in the line. Product mix decision product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing new variants of a brand to expand the business and to increase the profitability. Product mix decision notes product mix decision product.
The word diversification means that something new will be added. Product item a specific version of a product that can be designated as a distinct offering among an organizations products. This is where the concept of product mix and product line decisions occur, this article clearly explains the differences between product mix and product line in a detailed manner along with examples. Mar 14, 2020 the width of the product mix is equal to the number of product lines within a company. The depth of a product mix refers to how many variants are offered of each product in the line. Product mix width is the number of product lines a firm carries. Giving a firms product a name, term, symbol, design, etc that. Having identified a gap in the market, beiersdorf launched nivea visage young using an effective balance of the right product. Pdf firms often differentiate their product lines vertically to capture consumers. Product line lengththe number of different products a firm sells under a product line.
The product mix typically con sists of various product lines, which are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services. This is related to all the product mix and line decisions we have to take in a. For example, if a company owns a line of hygiene products and also owns a line of house cleaning products, all of those products together would constitute the product mix for the company. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Total number of items in the product mix of the company. Product diversification is a part of product line decisions. Given the existing product mix and the options available, the company must begin to take product decisions that are in line with longterm strategy and are consistent with that mix. However, the product line is a subset of the product mix. If this product line is eliminated, the product line managers salary is also eliminated unless the product line manager has a longterm employment contract. Set of all productsitems that a part sellers offers for sale to buyers. The consistency is the degree to which product lines are related 1. In offering a product line, companies normally develop a basic platform and module that can be added to meet different customer requirements.
To identify it as part of the mcdonalds product mix, the pizza was branded with the mc prefix. Apr 08, 2020 a product mix is a group of everything a company sells. A company with a wide product mix is generally perceived as more of an expert in the industry than a competitor with only one line. As mentioned in the previous example, colgate has 3 product lines.
Jul 23, 20 includes product line decisions along with their relative importance. A product line refers to a unique product category or product brand a company offers. Product mix decision making pmdm definition operations. Consumer product convenience product customer usually buys frequently, immediately, and with a minimum of comparison and buying effort shopping product in the process of selection and purchase consumers characteristically compare goods based on suitability, quality, price, and style. Product mix, branding, packaging, labeling, warranties, customer service. The width is all about the number of different product lines the company carries. It may refer to a new company, a new technology, a new market, or a new product. Jun 27, 2012 set of all product offered for sale by a company.
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