Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products. Your product lines may be fairly similar, such as dish washing liquid and bar soap, which are both used for cleaning and use similar technologies. Or your product lines may be vastly different, such as diapers and razors. Show
The four dimensions to a company's product mix include width, length, depth and consistency. TipProduct mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. The four dimensions to a company's product mix include width, length, depth and consistency. Width: Number of Product LinesThe width, or breadth, of a company's product mix pertains to the number of product lines the company sells. For example, if you own EZ Tool Company and have two product lines – hammers and wrenches – your product mix width is two. Small and upstart businesses will usually not have a wide product mix. It is more practical to start with some basic products and build market share. Later on, the company's technology may allow the company to diversify into other industries and build the width of the product mix. Length: Total ProductsThe product mix length is the total number of products or items in your company's product mix. For example, EZ Tool has two product lines, hammers and wrenches. In the hammer product line are claw hammers, ball peen hammers, sledge hammers, roofing hammers and mallet hammers. The wrench line contains Allen wrenches, pipe wrenches, ratchet wrenches, combination wrenches and adjustable wrenches. Thus, EZ Tool's product mix length would be 10. Companies that have multiple product lines will sometimes keep track of their average length per product line. In this case, the average length of your company's product line is five. Depth: Product VariationsDepth of a product mix pertains to the total number of variations for each product. Variations can include size, flavor and any other distinguishing characteristic. For example, if your company sells three sizes and two flavors of toothpaste, that particular line of toothpaste has a depth of six. Just like length, companies sometimes report the average depth of their product lines; or the depth of a specific product line. If the company also has another line of toothpaste, and that line comes in two flavors and two sizes, its depth is four. Since one line has a depth of six and the second line has a depth of four, your company's average depth of product lines is five (6+4=10, 10/2=5). Consistency is RelationshipProduct mix consistency describes how closely related product lines are to one another – in terms of use, production and distribution. Your company's product mix may be consistent in distribution but vastly different in use. For example, your company may sell health bars and a health magazine in retail stores. However, one product is edible and the other is not. The production consistency of these products would vary as well, so your product mix is not consistent. Your toothpaste company's product lines, however, are both toothpaste. They have the same use and are produced and distributed the same way. So, your toothpaste company's product lines are consistent. Product Market Mix StrategySmall companies usually start out with a product mix limited in width, depth and length; and have a high level of consistency. However, over time, the company may want to differentiate products or acquire new ones to enter new markets. They may also add to their lines similar products that are of higher or lower quality to offer different choices and price points. This is called stretching the product line. When you add higher quality, more expensive products, it's called upward stretching. If you add lesser quality, lower priced items, it's called downward stretching. What is a product mix?Definition: Product mix refers to the complete set of products or services offered by a business. These products or services are usually grouped within product lines, representing the different types of products offered For example, The Coca-Cola Company has its signature Coca-Cola brand, featuring original Coca-Cola, Diet Coke, Coke Zero, Cherry Coke, etc. This would be described as a product line, while their product mix consists of their Coca-Cola, Dr. Pepper, Glaceau Smartwater, Sprite (and so on) product lines. What is the product mix answer?The product mix is the total range of product lines and types a company has on sale for its customers. Major elements of a product mixA company’s product mix contains four main components.
What is a product mix, and what is a product item?A product item is a specific product version that can be designated as a distinct offering among an organization’s products. Put simply, while the Coca-Cola Company has a product mix, and the Coca-Cola labeled products would be a product line, a single can of Coca-Cola is a product item. Why are product mixes important?Understanding the concept of a product mix can help your business in multiple ways. Keeping a well-maintained product mix will: Address customer needsOffering a wide range of products means your business can cover multiple customer needs without losing sales to your competitors. If a customer can address all their needs with your company’s products, that customer will return again and again, knowing you offer just what they need. Improve business imageYour product mix is a key factor in determining the image of your business. Keeping your product mix stable and familiar will help your customers understand what you do as a business, as well as what they should expect from you. Provide focusUtilizing the product mix concept helps you stay focused on your core business. It’s natural to want to expand your product mix as your business grows to reach a broader range of customers. However, by doing this, you may alienate your existing customers by offering products or services that only a small percentage of people actually need. Inventory managementMaintaining inventory is tricky for any company, but even more so for a small business. Being a smaller business forces limitations on the number of products you can offer, so it’s vital to maintain a healthy product mix that reflects your core customers’ needs. Not only does this benefit your customer, but it also means you have less wastage when it comes to inventory management, as you’re only keeping the inventory you are selling. Difference between product mix vs product lineThe terms ‘product mix’ and ‘product line’ are often interchanged. And while they share some overlapping qualities, the two are actually very distinct. So… when it comes to product mix vs product line, what’s the difference?
When keeping product mix vs product line in mind, the key thing to remember is that a business needs to have a mixture of product lines to have a product mix. A company can have many product lines, but only one product mix. 6 key product mix strategiesAs product teams will know, there’s no direct correlation between the number of products you build and how much success you see. Below are 6 key product mix strategies so that you can make the most of the lines you launch. Expansion of product mix - Expansion of product mix is when a business increases its number of product lines. These new lines are often related to the company’s current product range but are unrelated to the present products. For example, if a beverage company introduces flavored water as a new product line, that would be an expansion of the product mix. Contraction of product mix - Sometimes it pays to shrink your product mix to eliminate poor-selling items. Which products are bringing your overall mix down and reducing ROI in product development? Identify them and cut them out. Deepening product mix depth - This strategy involves increasing product lines. Rather than adding new product lines, though, the business will look at more products that fit in with an existing product line. The result is a diversification of the product range. Alteration of existing products - Here, existing products are changed or optimized to meet customer needs, rather than introducing new products. Trading up - Trading up is when a company adds higher-priced items into its product line(s). This is designed to encourage more sales of mid-tier products and improve the prestige of the company. For example, when a software product launches a ‘Pro’ alternative. Trading down - This is the exact opposite of trading up.; lower-priced items are added to the product line to increase sales. How to perform a product mix analysisSo which of these key product mix strategies is right for you? Should you add new lines or diversify; trade up or trade down? The answer lies in your product mix analysis. A product mix analysis looks at a range of go-to-market strategies to determine the best product mix at a customer, regional, or national level. To perform a product mix analysis, you need to start by defining your scenario. Scenarios are usually defined by editing a demand plan or via a scenario wizard that only uses the necessary variables. Once the scenario is confirmed, users will re-create the plan while taking into account every constraint of the system. If the scenario tasks you with changing the product mix at a regional or national level, you will need to re-optimize the supply plan alongside any changes. The re-optimized plan will establish the impact on financial performance. Users will be able to see P&Ls by business unit, product, and major customer/store type, which will allow them to compare the impact of the new scenario vs the original plan. Get our All You Need To Know About Product Management eBookA comprehensive look at what product management is and how to distinguish what good product management looks like. Get the eBook What refers to the list of all products offered by a company?What Is a Product Line? A product line is a group of related products all marketed under a single brand name that is sold by the same company.
What refers to the number of product lines offered by the company?A product mix is the total number of product lines and individual products or services offered by a company. Additionally referred to as product assortment or product portfolio.
What is the term that refers to a products identity?Branding is the process of creating and disseminating the brand name, its qualities and personality. Branding could be applied to the entire corporate identity as well as to individual products and services or concepts.
What is the term for products that are bought and sold in the business?"Business products" sometimes refers only to products bought by businesses, but it is also used more broadly to refer to all products sold by businesses, whether to other businesses or to consumers.
|
