The following points highlight the five main applications of marginal analysis. The breadth of a product mix shows the different kinds of product lines that firm carries. 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. Quality is one of the marketers major positioning tools. An individual product in a line is known as a product item. Product mix decisions width, length, depth and consistency. The concept of product life cycle is also depicted using apt examples. Total number of items in the product mix of the company. If this product line is eliminated, the product line managers salary is also eliminated unless the product line manager has a longterm employment contract. Jun 03, 2015 line filling adding a new product within the current range of an incomplete line. The differential amount column in panel c of figure 7.
Decisions regarding sales mix and discontinuation of. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important. Apr 08, 2020 a product mix is a group of everything a company sells. The astrocosmo problem considered earlier is an example. For example, patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc. 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. As mentioned in the previous example, colgate has 3 product lines. Width of the product mix is measured by the number and variety of product lines offered by a firm. A firms product line or lines refers to the assortment of similar things that the firm holds.
Contraction of the product line dropping a product from the line. Considerthefollowinggraphicorganizertobetterunderstandtargetmarketing. An organizations value can be enhanced by continually improving how it meets the needs and wants of its customers. 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. Product line depth refers to the number of versions offered of each product in the line. A product mix is defined as the number of product lines that a company sells. Product design and development is a complex process that involves extensive engineering considerations as well as management decisions based on the overall vision for the product. A diagrammatic explanation of the product mix by taking microsoft suite of products as an example.
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. On the other hand a company may have number of product lines each of which may then have a number of products indicating width. Decisions regarding sales mix and discontinuation of product line practical application com content writer. Product mix consistency refers to the closeness of different product lines basis end use, production, promotion, distribution, etc. Managing product line and product mix free download as powerpoint presentation. Product line decisions building a strong product line. Product mix decisions in marketing management tutorial 08. 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. Positioning refers to peoples perceptions of a brand, an individual product or a product mix. Colemans product mix includes other lines of outdoor recreational equipment, such as canoes, sleeping bags, cookers, tents, and camping trailers. Having a broad productmix also spreads the risk of failure over a great number of product lines. Brother, for example, has both a line of laser printers.
A product mix is whole selection of product lines you offer. Achieving portfolio objectives principles of marketing. Philosophy that makes considerable sense when one views the rapidity with which a single productline can become outmodel or obsolescent and hence unprofitable. The product mix could include several lines of products or individual products that do not fall into a line. Product mix is defined as the set of all products and items that a particular seller offers for sale. Product line and product mix have direct relationship. This paper explaines that setup costs have some implications to consider in the product mix decisions. A product line is a group of products within the product mix that are closely related, either because they function in a similar manner, are sold.
Jul 23, 20 includes product line decisions along with their relative importance. Product mix decision making refers to the decision. The product mix is described in terms or width and depth. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management. The complete set of all products a business offers to a market. Number of different product lines carries by the company. 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. This is an application of the, dont put all your eggs in one basket. 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. Mar 14, 2020 the width of the product mix is equal to the number of product lines within a company. How a product mix can be used to enhance the value of a. Individual product decisionprinciples of marketing read.
There are two overarching strategies that deal with product line coverage. Managing product line and product mix business market. The product mix is made up of both product lines and individual products. Giving a firms product a name, term, symbol, design, etc that. On the other hand, a firm with a narrow product mix could be positioned as a boutique marketer of highly specialized goods. Simply, it shows the number of items in the product line. The product mix constitutes all individual product items and product lines the company markets. 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. The basic product policy strategy issues at the product line level cluster around the following questions.
Four important dimensions of a product mix can be identified. Line filling adding a new product within the current range of an incomplete line. 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. Product line lengththe number of different products a firm sells under a product line. This means nothing else than the number of items in a product line. Product mix product mix denotes product development, packaging, branding, and research. Product mix a companys assortment of product lines and individual offerings product mix widththe number of product lines offered. Product management lesson 2 product line decisions and branding. These benefits are communicated to and delivered by product attributes such as quality, features, style and design.
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. 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. Nov 04, 2012 the product mix is the collection of products lines and individual products that a business offers. 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. The primary one of the product line decisions is the product line length. 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. Product line depthtotal number of items under each brand in the line in terms of variants, shades, models, pack sizes. Product mix, branding, packaging, labeling, warranties, customer service. To identify it as part of the mcdonalds product mix, the pizza was branded with the mc prefix. A good understanding of product mix is a key element of marketing management.
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. 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. However, the product line is a subset of the product mix. This dimension of the product mix represents the extent to which the activities of the firm are diversified. Jun 27, 2012 set of all product offered for sale by a company. 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 length is the total number of items in the mix. For example, all the courses a university offers constitute its product mix. Product marketing in a business addresses five important strategic questions. The restaurant had experienced success with chicken mcnuggets and the egg mcmuffin earlier as nonhamburger and fries menu additions and.
Product mix decisions in marketing management tutorial 08 may. 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. Each of these product lines is intended to attract a specific customer. Consisting of the full array of a firms marketplace offerings, the mix is designed in terms of. Jan 22, 2018 a product mix is defined as the number of product lines that a company sells. 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. Certainly, the product line is too short if the company could increase profits by adding items to it. Product mix depth refers to the variants broadness and narrowness of a product in product line. Many companies start as a single product item or product line business. This enables an analysis of the constituency of the product mix to be made. Diversifies risk and capitalizes on established reputations.
Product management lesson 2 product line decisions and. Product mix analysis how to drive richer product mix. The product mix of a company involves all of the products that a company has for sale. The product mix is a combination of product lines and individual offerings that make up the product line. Product mix and product line understanding product length. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. The product mix is the collection of products lines and individual products that a business offers. It shows the degree of diversification of a firms activities.
Decisions regarding sales mix and discontinuation of product. Product item a specific version of a product that can be designated as a distinct offering among an organizations products. Relevant costs in product mix decision making seonmin kim. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The width is all about the number of different product lines the company carries.
A product line refers to a unique product category or product brand a company offers. Developing a product or service involves defining the benefits that it will offer. Product mix has three important aspectswidth, depth and consistency. In addressing this objective, the effectiveness of the integrated model will be evaluated under the artificial production line. Thus, product line width is a depiction of the number of product lines which a company has. The number of products in a product line refer to its depth, while the number of separate product lines owned by a company is the product line width. 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.
A product line can contain one product or hundreds of products. In modem times on producer or distributor or retailer deals in a single product. Product definition a productservice is the most important component of the marketing mix being the centre of focus as the offer to the market. A product mix is a group of everything a company sells. Abc and the toc is required for the proper modeling of the product mix decisions. Product decisions at these three levels are generally of two types. Product mix the perfect product must provide value for a customer the chartered institute of marketing, 2009, p.
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