The broad range of product categories include movies, crafts, gifts, college essentials, electronic items, home appliance, jewellery, photo centre, toys, outdoor living, funeral, grocery, video games etc. Product mix or product assortment refers to the number of product lines that an organisation offers to its customers. Product mix and product line understanding product. Expansion of product line process of adding more products to the line valid only if. Finally, an application of the proposed model is illustrated from a didactic example involving a manufacturing environment. Get an answer for what is product line, product mix, line extension, line width and line depth. Stretching the product line the marketing study guide. The length of your product line is measured by how many products it contains, and that will vary with the product. Product line is a group of products that are closely related either because they satisfy a class of need, or used together, are sold to the same customer group, are marketed through the same types of outlets, or fall within given price ranges or that are considered.
Timedriven activitybased costing as pointed by tsai et al. In cost accounting, product mix refers to the mix of products you produce. Product mix strategy and manufacturing flexibility. Although viewed initially as competing theories, spoede, et al. A product line often evolves, as manufacturers want to take advantage of a brands value and the success of other products in the mix. Product is defined as anything that is offered to public for purchase by the company. As a growing business their aspiration to become the biggest in the industry drives them to find new ways to market their products starting with the soontobelaunched plastic office trunking system. With an understanding of the product mix, businesses can develop a strategy to reach their. Apr 08, 2020 product mix, also known as product assortment, is the total number of product lines that a company offers to its customers. In offering a product line, companies normally develop a basic platform and module that can be added to meet different customer requirements. The product strategy calls for building a product line. Companies have to develop strategies for the items of their product lines. Product mix, branding, packaging, labeling, warranties, customer service.
Before turning to the product mix decisions, we first have to know what the product mix actually is. Product mix decisions width, length, depth and consistency. This dimension of the product mix represents the extent to which the activities of the firm are diversified. Mar 14, 2020 the width of the product mix is equal to the number of product lines within a company. Stretching the product line means taking it beyond the established positioning of the range of products. Aug 04, 2015 to receive additional updates regarding our library please subscribe to our mailing list using the following link. Reframing the product mix problem using the theory of. Sampling is a smart way to present fewer amounts of products to the customers with no cost, and it can be sent directly to the customer by mail or attach the sample to another type of products, so they can able to test or try the product rather than just hear about it, which it can affect their behavior to purchase it in the near future kardes. A product line can be also be lengthened by adding more items within the present range e. In addressing this objective, the effectiveness of the integrated model will be evaluated under the artificial production line. Product management lesson 2 product line decisions and branding published on june 3, 2015 june 3, 2015 24 likes 0 comments. There are various decisions which the management of a company should take about products we should sell, different categories of products, different versions of products, etc.
However, the product line is only one element of the much larger product mix. This is where the concept of product mix and product line decisions occur, this. Products arent only tangible objects, they can also be services. Product line decisions, obviously, need to be made carefully. Pdf productmix analysis with discrete event simulation. The marketing mix established for one product may affect the sales of another product. These decisions are about product attributes, branding, packaging, labeling, and product support services. You just need to work out the most profitable product mix. Simply, it shows the number of items in the product line. The products are similar and focus on the same market sector. Product line decisions building a strong product line. Individual product decisionprinciples of marketing read. Every company deals with limited capacity, so smart decisions about product mix can greatly increase your profit. We will focus on the important decisions in the development and marketing of individual products and services.
The breadth of a product mix shows the different kinds of product lines that firm carries. Product line group of products that are closely related because. Reframing the product mix problem using the theory of constraints john davies and vicky mabin school of business and public management victoria university of wellington wellington new zealand vicky. Once product types are selected, decisions must again. Competitive strategies for new product marketing over the life cycle. Product mix planning is important aspect of companys overall strategy. Urban and others published a model for product line. What is a product line, and how should it be set up. Product lines are created by companies as a marketing strategy to capture the sales of consumers who are already buying the brand. Retailers carry a mixture of products to satisfy various customers. A product line is a broad group of products, intended for similar uses and having similar characteristics. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management a product is any offering to the market for attention, acquisition, use or consumption that might satisfy a need.
The product mix of a company is generally defined as the complete set of all products a business offers to a market. Productmix decision from the perspective of timedriven. A product mix is the set of all products a particular seller offers for sale. It offers the ability to expand your customer base by offering more products in more niches. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Total number of items in the product mix of the company. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Assortment of size, colour and models offered in each item of a product line. The product mix includes both product lines and product items. F a i r d e a l i n g s h o r t e x c e r p t reading. A product line is a group of products that a company creates under a single brand. This is related to all the product mix and line decisions we have to take in a companys marketing department. Product mix decisions are taken with reference to demand. Jan 26, 2019 those decisions are often expressed as the length of your product line, and the width or breadth of your overall product mix.
A mathematical modeling approach to product line decisions glen. Product mix the complete set of all products offered by a. For example, if a company owns a line of hygiene products and also owns a line of house cleaning products, all of those products together would constitute the product mix for the company. Products cannot be optimized individually and then added to the line to produce optimum product line results. Product mix is defined as the set of all products and items that a particular seller offers for sale. In the overall product mix decision, a firm needs to consider product line. The product mix of a company involves all of the products that a company has for sale.
Limitations of conventional marketing mix modelling p. Product mix decisions in marketing management tutorial. After getting a taste of success and with an availability of more resources, companies. Product positioning is a strategic management decision that determines the place a product should occupy in a given market its market niche. For example product mix of bajaj company has more than 100 items in various product lines, such as fans, bulbs and tubes, heaters, motorbikes, shooters, richshow, processing machines, and many other ranges. The product mix constitutes all individual product items and product lines the company markets. Jul 23, 20 trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product.
Decisions regarding the product, price, promotion and distribution channels are decisions on the elements of the marketing mix. The width of the product mix is equal to the number of product lines within a company. This enables an analysis of the constituency of the product mix to be made. To accomplish this, all such models employ econometric techniques to decompose product. Abc and the toc is required for the proper modeling of the product mix decisions. The product mix could include several lines of products or individual products that do not fall into a line. Product line and product mix have direct relationship.
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 marketed through the same types of outlet, or fall within given price ranges. Product mix expansion is achieved by increasing the depth within a particular product line i. It refers to the total number of items in all the product lines in product mix. Product line is a group of related products manufactured or marketed by a single company. In general terms, our conclusions are in line with past studies in terms of what affects the use of real options in investments evaluations, considering the impact of demand volatility. Eliminating existing products items from an established product line due to being obsolete, declining sales, and new product line direction. Product mix decision making pmdm definition operations.
Ch8 managing products, product lines, brands, packaging. Pdf product strategies of companies in the fmcg industry. The product mix represents the collection of different products that a business offers its customers. Too much variety in the product mix is often too costly to maintain, and too many brands may weaken the firms brand reputation. Product line decisions are difficult because the prod ucts in the line are not usually independent. The product lines may range from one to many and the company may have many products under the same product line as well. For a company in the middle range of the market, stretching the product line in both directions may be best. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important.
Product item a specific version of a product that can be designated as a distinct offering among an organizations products. Marketer should study consumer behaviour to find the popularity of products. The aim of this work was to be an investigation of the decisions and evaluations about the equipment to be chosen, considering the mix index impact. Decisions on a product line level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. The impact of promotional tools on consumer buying. Capacity and product mix in cost accounting dummies. Product line decision product line managers takes product line decisions considering the sales and profit of each items in the line and comparing their product. Decisions regarding sales mix and discontinuation of product. A product mix consists of various product lines and has a certain width, length, depth, and consistency. Thus, product line width is a depiction of the number of product lines which a company has. A product line is too short if profits can be increased by adding items.
Product mix, also known as product assortment, is the total number of product lines that a company offers to its customers. A product mix is an important consideration for any firm. A product line is a group of related products under a single brand sold by the same company. Product definition a product service is the most important component of the marketing mix being the centre of focus as the offer to the market. Such products function in similar manner, sold to the same customer group, sold through the same type of outlets, and fall within a same price range. Therefore, the right product mix decisions should be taken, in line with customer needs. Since customer needs may change rapidly, product mix decisions need to be taken more than once at the beginning product mix decisions are part of an ongoing process. The product mix sometimes called product assortment is made up of both product lines and individual products. Managing product line and product mix free download as powerpoint presentation. This is where the concept of product mix and product line decisions occur, this article clearly explains the differences between product mix and product line in a detailed manner along with examples. Thereby, the company can serve both the upper and lower ends of the market. The product mix, also called product portfolio, is the set of all product lines and items that a company offers for sale. Products, services, and product mix decisions marketing. The following product mix example will illustrate not only product mix lp formulations, but also.
A mathematical modeling approach to product line decisions. Trading down introducing a low priced product to the prestigious line so as to cater increased demand. These dimensions of the product mix serve as guides to decisions regarding the additions and deletions of product items and line. For example hindustan uniliver has a broad product mix with several product lines such as soap line, food line, personal care line home care line and so on the number of items in each product line is called the product mix length. Hence, normally done by persons with experience with understanding of market oriented strategic planning. The basic product policy strategy issues at the product line level cluster around the following questions. Products, services, and product mix decisions a product is anything that can be acquired by a consumer to satisfy their specific wants and needs. What is product line, product mix, line extension, line width.
View notes ch 11 product mix and product line decisions. Product mix decision making pmdm a product mix is defined as the number of product lines that a company sells. It refers to the relationship of various product line either in their end use, production requirement, distribution channel. What is meant by product line, length, breadth, consistency and depth. Product mix and product line understanding product length. Managing product line and product mix business market. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. M cain1 1 introduction the primary function of all marketing mix models is to quantify the sales contribution of marketing activities, with a view to calculating return on investment roi.
Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. All of these product lines when grouped together form the product mix of the company. It can be argued that product decisions are probably the most crucial as the product is the very epitome of marketing planning. For instance, one product line could be geared toward teenagers and another one toward. Urban and others published a model for product line decisions find, read and cite all the research you need on researchgate. The product mix is described in terms or width and depth. Understanding the basics of a product mix will help you understand why it is so important to your organization. A product line in business is a group of related products under the same brand name that is manufactured by a single company. Product management lesson 2 product line decisions and.
This paper explaines that setup costs have some implications to consider in the product mix decisions. Marketing mix decisions, to a greater extent, depend on plant or production capacity of company. Decisions regarding sales mix and discontinuation of product line practical application com content writer. The astrocosmo problem considered earlier is an example. By increasing the consistency of product mix, a firm can reduce its costs of operations and acquire unparalleled reputation in the market. Relevant costs in product mix decision making seonmin kim. Again if we use the apple example above, in the mobile phone market apple only offers smart phones of high quality. The product mix is the variety of products a company produces or sells to the marketplace. Product line depth refers to the number of versions offered of each product in the line. Decisions on a productline level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. If you manufacture lawn tractors, three base models and their accessories might represent a good line. Company will design its product mix in a way that optimum production capacity can be utilized. The same company might also offer other product lines. Limitations of conventional marketing mix modelling.
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