Question

There is a growing trend among companies to employ the strategy of Product Mix. Analyze the key dimensions of Product mix. What are the key justification for using this strategy/concept?

Answer 1

Product mix is a combination of total product lines within a company. It is also called product portfolio A company like HUL has numerous product lines like Shampoos, detergents, Soaps etc. The combination of all these product lines is the product mix. In other words, it is the set of all product lines and items that a company offers for sale.

The product line is a subset of the product mix. The product line generally refers to a type of product within an organization. As the organization can have a number of different types of products, it will have similar number of product lines. Thus, in Nestle, there are milk based products like milkmaid, Food products like Maggi, chocolate products like Kitkat and other such product lines. Thus, Nestle’s product mix will be a combination of the all the product lines within the company.

The key dimensions of Product mix are:

1) width
2) length
3) depth and
4) consistency

Width : The width is all about the number of different product lines the company carries.For example, if there are 4 product lines within a company, and 10 products within each product line, than the product line width is 4 only.

Length : The product mix length refers to the total number of items a company carries within the product lines. For instance, Colgate carries several different brands within each line. In Colgate’s oral care product line, several different categories of toothpastes can be identified. A car manufacturer may have several series in its car product line, such as 3-series, 5-series, and 7-series.

Depth : It refers to the number of versions offered for each product in the product line. For instance, Colgate toothpastes come in several tastes and variations.Another example, if a company has 4 product lines and 10 products in each product line, than the product mix depth is 10.

Consistency : The lesser the variations between the products, the more is the product line consistency. For example, Amul has various product lines which are all dairy related. So that product mix consistency is high. But Samsung as a company has many product lines which are completely independent of each other. Like Air conditioners, televisions, smart phones, home appliances, so on and so forth. Thus the product mix consistency is low in Samsung.

The key justification for using this strategy are:

• The effect of a good product mix is increased sales because you are able to capture consumers from across the market and avoid a consumer switching to a competitor.
• Product mix is important in determining the image of a business and brand, as it helps to maintain consistency in the eyes of the target market.
• Making use of a product-mix concept helps to stay focused on core business.