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Start-up entrepreneurs always brainstorm during the product development phase on the product mix strategies to work with.
This determines if the business will be relevant in the market over time or not.
Therefore, putting these strategies in place from the onset will enhance business growth.
As a result, this article has explained the product mix strategies for your business, as well as, its difference with product line. Stay with us!
What is Product Mix?
Product Mix is also known as product assortment or product portfolio. It refers to the complete set of products or services offered by a company
It basically consists of product lines which are the items customers use together. For example, milk and milo.
Some companies have product line within the same product line like liquid soap and washing bar, while others have within different product lines like diapers and hair extentions.
There are four dimensions of a company’s product mix. They are; Width, which shows the number of product lines; Length, which shows the total products in your mix; Depth, which shows product variations; and Consistency, how the product mix are related to each other.
Product Mix Elements
As mentioned earlier, there are four elements of product mix. We will discuss about them in this segment.
#1 Width: Number of Product Lines
Start-ups usually have a narrow or small product mix. As the business expands, they also expand their product lines. And invariably product mix. This is often advised so that the startup can obtain a good market share in its streamlined product lines.
#2 Length: Total Products
The length refers to the number of total products in your product mix. Using the example above, the product line is business plans and past questions. Business plans consist of over 500 business plans like snail farming, baking, fashion, laundry, etc. The same goes for business consulting services like advisory roles, Idea generation, problem-solving, staff training etc
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So, the total number of these products make up the length. Also, companies that have many product lines may keep track of the average length per product line.
#3 Depth: Product Variations
This is 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 bread, that bread has a depth of six.
Sometimes, companies can report the average depth of a product line.
#4 Product Mix Consistency: Relationship
Product mix consistency is an advantage to firms trying to position themselves as a niche producer or distributor. In addition, consistency helps improve brand image.
Difference between Product Mix and a Product line
Product mix is defined as the set of all products a particular seller has for sale. Product mix is also called as product assortment. A product Mix consists of various product lines.
See Also : Target Marketing
These variations come about as a need to widen customer base and attract customers of all spheres of life. Also, they use it to eliminate new market entrants and possible competitors.
For example, Samsung has a product line of mobile phones. But, the phones have different models which range from cheap and affordable phones to expensive ones.
This different models of phone for different classes of customers is known as product line.
Some attributes of product lines are:
Line Stretching: This occurs when companies increase their products beyond the current range. This can be Downmarket stretch, Upmarket Stretch, and Two-way stretch.
Line filling: Adding more products within the present range. It is more like filling out the missing items so that customers will buy all items from you thereby increasing profit.
For example, a phone shop like Samsung adding earphones, memory cards to their collection. They already did.
Line modernization deals with upgrading to new technologies so that customers will upgrade to higher priced and valued items.
Line featuring deals with featuring a few products in the line just to attract customers into a showroom where all models will be exposed. This can be likened to a promotion.
We have to understand that the product line is a subset of product mix. For example, Samsung offers mobiles, T.V’s, A.C’s, washing machines, etc. Mobiles phones are one product line, T.V is another one. These product lines put together is called a product mix.
Product Mix Examples
One of the examples of product mix is Coca-Cola.
In this post, we will assume that Coca-cola has two product lines which are soft drinks and juice. In the classification of soft drinks are Coke, Fanta, Sprite, Diet Coke, Zero coke. And for Juice, we have Guava, Mango, and Mixed fruit.
Now, using the elements of the product mix.
The Width is two: soft drinks and juice.
The length is the total number of products eight.
Depth: Using the example above, there is just one flavor/variation in the products. So, the depth is eight.
Consistency: This will be very high because all the products are beverages. In addition, production and distribution channels remain similar for each product.
Product Mix Strategies
When companies are starting out, it is important, to begin 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.
Do you want to scale your business? Do well to follow these product mix strategies for your business to boom. Contact us in the comment box if there are any questions or ideas you’d like to share.