Product mix, also known as product assortment, refers to the complete range of products a company makes available for consumers. This includes all the product lines and individual items within those lines that a business holds for sale. The product mix is a key element in a company’s overall marketing strategy and can greatly influence market performance.
Components of Product Mix
Product Line Width
The width, or breadth, of a product mix refers to the number of different product lines a company offers. For example, a company may have lines in electronics, home goods, fashion, and food products.
Product Line Length
The length of the product mix refers to the total number of items a company carries within its product lines. If a company offers a variety of electronic products such as televisions, smartphones, and laptops, the count of these items determines the product line length.
Product Line Depth
The depth of the product mix pertains to the number of variations each product line offers. This includes variations in size, flavor, or any other differentiating attribute. For instance, a beverage company offering sodas in different flavors and packaging sizes demonstrates depth.
Product Line Consistency
Consistency concerns how closely related various product lines are concerning their distribution channels, production requirements, end-use, etc. Companies often strategize around consistency to streamline operations and branding efforts.
Special Considerations
Market Demands
Understanding consumer needs and trends is critical in determining an effective product mix. Firms often employ market research to align their product mix with consumer preferences.
Production Capabilities
A company’s capability to produce and manage various products influences the product mix. Limiting factors such as manufacturing technology, labor skills, and supply chain efficiency play significant roles.
Brand Strategy
A coherent brand strategy integrating product mix helps in maintaining a strong market presence. Companies must balance expanding their product mix to capture new market segments while avoiding brand dilution.
Examples of Product Mix
Example 1: Apple Inc.
Apple Inc. presents a quintessential example of a tactically planned product mix. Its core product lines include iPhones, iPads, Macs, and services like Apple Music and iCloud, each offering multiple variations that cater to different customer segments.
Example 2: The Coca-Cola Company
The Coca-Cola Company’s product mix is extensive, covering soft drinks, bottled water, energy drinks, and more. Under each category, multiple variants exist, showcasing a deep and diverse product mix.
Historical Context
Historically, the concept of a product mix has evolved with the complexity of consumer markets and advancements in production technology. In the early 20th century, companies with narrow product lines expanded their mix to diversify risks and capitalize on market opportunities.
Applicability in Business Strategy
A well-defined product mix is essential for:
- Targeting different market segments
- Achieving customer satisfaction and loyalty
- Differentiating products from competitors
- Responding effectively to market changes
Comparisons and Related Terms
Product Line
A subset within the product mix offering related products is known as a product line. Example: Dell laptops within the broader electronics product mix.
Product Portfolio
The term product portfolio is often used interchangeably with product mix. It implies a collection of all products a company manages.
FAQs
What determines a good product mix?
How can a company expand its product mix?
What are the risks of an extensive product mix?
References
- Kotler, Philip, and Keller, Kevin. “Marketing Management.” 15th ed., Pearson, 2016.
- Busi, Marco, and Bititci, Umit. “Collaborative Performance Management: Present Gaps and Future Research.” International Journal of Productivity and Performance Management, 2015.
Summary
The product mix is a fundamental concept in business management, encompassing all the product lines and individual products a company offers. It plays a critical role in marketing strategies, product differentiation, and fulfilling market demands. Companies must carefully manage their product mix to align with consumer needs, operational capabilities, and brand strategy while being mindful of associated risks and challenges.
By understanding and optimizing their product mix, companies can effectively compete in diverse markets, ensuring long-term sustainability and growth.
