PRODUCT MIX

DECISIONS
 Definitions
Product
Anything offered to a market for attention,
acquisition, use, or consumption that might satisfy
a need or want.
Service
A form of product that consists of activities,
benefits or satisfactions offered for sale that are
essentially intangible and do not result in the
ownership of anything.
 What is a Product?
Products, Services, and Experiences
Market offerings may consist of a combination of
goods and services
Experiences are used to differentiate offerings
Levels of Product and Services
Core benefit, actual and augmented product
Product and Service Classifications
Consumer products and industrial products
 What is a Product?

Types of Consumer Frequent purchases bought

Products with minimal buying effort and
little comparison shopping
Low price
Convenience
Widespread distribution
Shopping Mass promotion by producer
Specialty
Unsought
 What is a Product?

Less frequent purchases

Types of Consumer
More shopping effort for
Products comparisons.
Higher than convenience good
Convenience pricing
Shopping Selective distribution in fewer
outlets
Specialty Advertising and personal selling
Unsought
 What is a Product?

Types of Consumer Strong brand preference and

Products loyalty, requires special
purchase effort, little brand
comparisons, and low price
Convenience sensitivity
Shopping High price
Exclusive distribution
Specialty
Carefully targeted promotions
Unsought
 What is a Product?

Types of Consumer Little product awareness and

Products knowledge (or if aware,
sometimes negative interest)
Pricing varies
Convenience Distribution varies
Shopping Aggressive advertising
and personal selling by
Specialty producers and resellers
Unsought
 (HUL’s )Product policy : An
introduction
Color Skin Oral Confec Hair Deodoran Soaps Toilet Bevera food
cosmeti care care tionarie care ts & Soaps ges
cs s deterg
ents
Lakme Fair & pepsode nt Max Sunsilk Axe Surf Liril 3 roses Knorr
lovely Annapur
na Atta
Aviance Pond’s toothbrus h Clinic Pond’s Rin Lifebuoy Lipton Knorr
yellow Annapur
label na Salt
Close up Rexona Wheel Lux Lipton Modern
green foods
label range
Denim Vim Breeze Lipton Ice Kwality
tea Wall’s
feast
Ala Pears Red Label Kwality
Wall’s
cornetto
OK Hamam TajMahal Sundae’

Dove Brooke Kissan

Bond
 Product mix concepts
 Product Mix – set of all products offered by the
company for sale
 Product line- a group of related products
constitute a product line
 E.g – Bata had a range of 1138 product

lines(1999)
 Width of Product mix- no of product lines in the
product mix e.g 10 lines in HUL’s product mix
 Length of the product mix is the total no of

items in the mix(our example ,it is 46)

 Avg length of a line- total length/no of lines
Product mix concepts
 Depth – the depth of the product mix is the
assortment of all sizes, colours and variations
offered for each product in the product line
 For example- Lifebuoy Active Red comes in
three sizes- 125 gms,100 gms and 60 gms
cakes
 Consistency : closeness exhibited by the
product lines in production requirements ,
distribution and end usage
 For example- most of the HUL Product lines
are consistent as they are consumer goods
distributed using similar channels and
 Product Mix Strategies
 Trading up-Offer high priced , prestige products
to their existing product line in an effort to
increase the sale of their low priced products
and enhance the company image
 E.g. – Lifestyle
 Trading down –new products, low priced to the
existing line
 E.g –Marriot Corporation introduced a new
chain of Hotels called ‘Holiday Inn’ to cater to
the needs of not so affluent customers
 Product Mix strategies
 Product line analysis – too short Vs too long
 Company’s objectives affect product line
length
 Market share and Higher Profitability
 Line stretching
 A company stretches its product line beyond
the current range of products. It can stretch its
product line in either the down market , up
market or both
 Down Market stretch – introduce the products
at a lower price
 E.g – 3 Roses for the lower end market (HUL)
 Reasons- Middle market stagnation, potential
for growth in Down market ,aim to tie up with
the lower end competitors
 Up market stretch
 Enter the high end of the market
 The objective of the firm may be to have higher

growth , increase its margins, or to simply

project itself as a full line mfgg firm
 E.g Lipton Yellow Label (HUL) is a high end
stretch with Rs 75 for 250 gms tea .
 A company serving in the middle market might

indulge in stretching its product line both ways

– upward and downward
 Line filling Vs Line Pruning
 Kimberley Clark –closed underperforming
business –Midwest express
 Company might be carrying some products in

the product line that yield lower or no profits.

 Prune or remove unnecessary products
 Reasons for Line extensions
 Marketing Managers perceive line extension
as a low cost , low risk way to meet the needs
of various customer segments .
 Extension helps reducing the cost of Marketing
research and direct marketing .
 US based POP advertising institute- line
extensions stocked in a retail outlet can help a
brand increase its shelf space and attract
customer’s attention
 Limitations of line extensions
 Super saturation would lead to weakening of
product lines.
 Profits are short lived ,efforts can be

duplicated by the competitors!!

 New ideas get stagnated

 Lowers brand loyalty