A group of all product lines and commodities supplied by a seller to its customers is called ‘product mix’. It can also be termed as ‘product assortment’. A product mix is offered by a company which has many product lines under its tag. Generally, it is not necessary to have correlated items in a product mix. Thus, product mix is a mixture or combination of all the products made available by a firm to its customers. It can also be termed as “a compilation of the various products produced or marketed by a company”. For example, a company’s product mix consists of shampoos, detergents, soaps, etc., produced by it.
The product mix of a company can be strengthened to satisfy the fresh requirements of customers or group of customers so as to help the organisation develop and progress. Expansion and inclusion of products leads to an exhaustive marketing budget for the company. This addition may cause competition by the similar brand in the market and overlapping of marketing strategies. For example, the Dodge Challenger and the Ford Mustang are strong rivals in the car industry but each one attempts to satisfy consumer requirements.
Product Mix Decisions
The product mix of an enterprise has particular length, width, depth and consistency. All these factors are explained below with the help of an example about product mix of Hindustan Unilever Limited:
Figure 2.2: HUL Mix
Product Mix Length: The total number of products comprising the product mix is termed as the product mix length. Several brands are pan of each product line offered by Hindustan Unilever Limited. For example, product mix consists of ten soaps, four shampoos, two toothpastes, six laundry detergents, etc.
Product Mix Width: The number of product lines offered by a company denotes the span or width of the product mix. HUL offers a considerably extensive product mix which consists of several product lines dealing in cosmetics, food, household cleaning products. paper, medicines and personal care products. The product mix width of HUL is represented by five product lines in the figure 2.2. There are several other product lines which are part of the product mix of HUL.
Product Mix Depth: Different forms of products available in the product line define the depth of the product mix. It is understood that the various types of products available in the product line form the product mix depth. For example, the famous toothpaste ‘Close up’ is available in three types namely; blue, green and red and in 5 sizes, it can be concluded that the depth of Close up is 15. In case of HUL, the average of various kinds of product groups offered under the brand name need to be calculated for computing the average product mix depth.
Product Mix Consistency: The close association of the product line in terms of the final consumption, product distribution networks, manufacturing requirements or any other possible ways. decides the consistency of the product mix. As HUL majorly deals in consumer goods, all product lines have maintained required consistency level because of similar distribution networks.
Product Mix Strategies
The major product mix strategies required to be managed are explained below:
Product Line Expansion/Contraction: A collection of many product lines is termed as concentration of product mix. An extended and lengthy product line is cut back to remove the products which are not cost effective. Extending the current product line is termed as diversification. Widening the depth and width of the product mix can help the organisation in availing the prevalent opportunities in the market. For example, companies dealing in audio equipment manufacturing can expand its activities by manufacturing television sets. There may be additions or deletions or even both in the current product lines by an organisation. Application of latest and ultra-modern technology helps a company to have an upward stretch or it may settle for a downward stretch by using lucid technology.
Product Modification: This product mix strategy talks about modifying or altering the basic features of a product namely; shape, size, style, cost, colour, etc. A company usually considers modification method. When it is striving to revive or strengthen the demand of a particular product. At times, simply an external alteration is necessary in a product or in the product line. The modification being tangible or intangible can be accomplished by re-creating, re-developing, altering size and including or eliminating some characteristics related to the product. For example, popular pan masala brand, Pan Parag, launched small packets offering different quantities and at variable costs to gain access to different market segments and to increase its market area. Also, diverse growth was observed in the market share of the product when the company planned to include tobacco, i.e., zarda, in the pan masala. Several factors like organisational objectives in the long-run, competitive growth observed in specific product market and consumer needs and priorities majorly influence the product modifications.
Product Elimination: It is always not possible to refine or change products to complement the market requirements. On such cases, removing these products from the market can prove to be a beneficial option. The activity of removing the product is known as ‘product elimination’ in technical terms. This activity of elimination or deletion can be for the whole product line or for a specific item of the product line. Products with non-profitable scale of production and poor cost-inventory analysis (due to low demand) are generally eliminated from the market. The profit levels may not justify the unreasonable management time consumed by such product. Since, these products are obsolete they may lower the company’s reputation. Therefore, elimination decision is very crucial in such cases.
