Product Mix Decision
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 marked through the same types of outlets, or fall within given price ranges.
An organization with several product lines has a product mix.
Each product line consists of several sublines. For example, cosmetics break down into lipstick, rouge, powder, and so on. Each line and subline has many individual items. Altogether, Avon’s product mix includes 1,300 items.
A company’s product mix has four important dimensions: width, length, depth, and consistency.
The width of P&G’s product mix refers to the number of different product lines the company carries.
The length of P&G’ product mix refers to the total number of items the company carries.
The depth of P&G’ product mix refers to the number of versions offered of each product in the line.
The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or in some other ways. P&G’s product lines are consistent insofar as they are consumer products that go through the same distribution channels. The lines are less consistent insofar as they perform different functions for buyers.
These product mix dimensions provide the handles for defining the company’s product strategy. The company can increase its business in four ways. It can add new product lines, thus widening its product mix. In this way, its new lines build on the company’s reputation in its other lines. The company can lengthen its existing product lines to become a more full-line company. Or it can add more product versions of each product and thus deepen its product mix. Finally, the company can pursue more product line consistency — or less — depending on whether it wants to have a strong reputation in a single field or in several fields.
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