Product Mix
- Thread starter paperwala
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shashank_sureka
New member
gud one...keep up the gud work
namitadhingra
Namita Dhingra
hi does anyone know what a product mix decison is.......... please help me in this as i have a case study to do on this
Kalpana Heliya
Par 100 posts (V.I.P)
“ The set of all product lines and items that a particular seller offers for sale’”
Avon’s product mix consists of four major product lines. Cosmetics, Jewelry, fashions and household items. Each products line consists of several sub lines. For example, cosmetics breaks down into lipstick, eyeliner, powder and so on. Each line and sub line has many individuals items.
Avon’s product mix includes 1300 items. Kmart Stocks 15000 items, 3M markets more than 60,000 products and general electric manufactures as many as 2,50,000 items.
A company product mix has four important dimensions (i) width (ii) length (iii) depth and (iv) consistency.
(i) Width Product mix width refers to the no. of different product lines the co. Carries. e. g. Procter & Gamble consisting of may product lines, paper, food, household, cleaning, medicinal, cosmetics and personal care products.
(ii) Length Product mix length refer to the total no. of items the Co. carries within its products lines. Procter & Gamble typically carries many bands with in each lines, for example, it sells eleven laundry detergent, eight hand soap, six shampoo and four dishwashing detergent.
(iii) Depth Product mix depth refer to the no. of versions, offered of each product in the line. Thus Procter & gamble’s Crest Tooth Paste comes in three size and two formulation (paste & Gel)
(iv) Consistency Consistency of product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.
Source: pgdba.blogspot.com
dimpy.handa
Dimpy Handa
Often firms take decisions to change their product mix. These decisions are dictated by the above factors and also by the changes occurring in the market place. Like the changing life-styles of Indian consumers led BPL-Sanyo to launch an entire range of white goods like refrigerators , washing machines, and microwave ovens .It also motivate the firm to launch other entertainment electronics. Rahejas, a well-known builders firm in Bombay, took a major decision to convert one of its theatre buildings in the western suburbs of Bombay into a large garments and accessories store for men ,women and children, perhaps the first of its kind in India to have almost all products required by these customer groups Competition from low priced washing powders (mainly Nirma) forced Hindustan Levers to launch different brands of detergent powder at different price levels positioned at different market segments .Customer preferences for herbs, mainly shikakai motivated Lever to launch black Sunsilk Shampoo ,which has shikakai .Also ,low purchasing power. and cultural bias against shampoo market made Hindustan Lever consider smaller packaging mainly sachets , for single use .So, it is the changes or anticipated changes in the market place that motivates a firm to consider changes in its product mix.
a.chandras
Amit Chandras
good 1
products - introduction
A product is defined as:
"Anything that is capable of satisfying customer needs"
This definition includes both physical products (e.g. cars, washing machines, DVD players) as well as services (e.g. insurance, banking, private health care).
The process by which companies distinguish their product offerings from the competition is called branding.
For most companies, brands are not developed in isolation - they are part of a product group.
A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they provide (e.g. Dell's range of personal computers or Sony's range of televisions).
There are two main types of product brand:
(1) Manufacturer brands
(2) Own-label brands
Manufacturer brands are created by producers and use their chosen brand name. The producer has the responsibility for marketing the brand, by building distribution and gaining customer brand loyalty. Good examples include Microsoft, Panasonic and Mercedes.
Own-label brands are created and owned by distributors. Good examples include Tesco and Sainsbury's.
The main importance of branding is that, done well, it permits a business to differentiate its products, adding extra value for consumers who value the brand, and improving profitability for the company.
Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.
Two models of product portfolio planning are widely known and used in business:
%u2022 The Boston Group Growth-Share Matrix, and
%u2022 GE Market Attractiveness model
These models are described in more detail in other tutor2u revision notes.
Businesses need to regularly look for new products and markets for future growth. A useful way of looking at growth opportunities is the Ansoff Growth matrix which suggests that there are four main ways in which growth can be achieved through a product strategy:
(1) Market penetration - Increase sales of an existing product in an existing market
(2) Product development - Improve present products and/or develop new products for the current market
(3) Market development - Sell existing products into new markets (e.g. developing export sales)
(4) Diversification - Develop new products for new market
A product is defined as:
"Anything that is capable of satisfying customer needs"
This definition includes both physical products (e.g. cars, washing machines, DVD players) as well as services (e.g. insurance, banking, private health care).
The process by which companies distinguish their product offerings from the competition is called branding.
For most companies, brands are not developed in isolation - they are part of a product group.
A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they provide (e.g. Dell's range of personal computers or Sony's range of televisions).
There are two main types of product brand:
(1) Manufacturer brands
(2) Own-label brands
Manufacturer brands are created by producers and use their chosen brand name. The producer has the responsibility for marketing the brand, by building distribution and gaining customer brand loyalty. Good examples include Microsoft, Panasonic and Mercedes.
Own-label brands are created and owned by distributors. Good examples include Tesco and Sainsbury's.
The main importance of branding is that, done well, it permits a business to differentiate its products, adding extra value for consumers who value the brand, and improving profitability for the company.
Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.
Two models of product portfolio planning are widely known and used in business:
%u2022 The Boston Group Growth-Share Matrix, and
%u2022 GE Market Attractiveness model
These models are described in more detail in other tutor2u revision notes.
Businesses need to regularly look for new products and markets for future growth. A useful way of looking at growth opportunities is the Ansoff Growth matrix which suggests that there are four main ways in which growth can be achieved through a product strategy:
(1) Market penetration - Increase sales of an existing product in an existing market
(2) Product development - Improve present products and/or develop new products for the current market
(3) Market development - Sell existing products into new markets (e.g. developing export sales)
(4) Diversification - Develop new products for new market
products - product life cycle
We define a product as "anything that is capable of satisfying customer needs. This definition includes both physical products (e.g. cars, washing machines, DVD players) as well as services (e.g. insurance, banking, private health care).
Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.
The stages through which individual products develop over time is called commonly known as the "Product Life Cycle".
The classic product life cycle has four stages (illustrated in the diagram below): introduction; growth; maturity and decline
Introduction Stage
At the Introduction (or development) Stage market size and growth is slight. it is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product.
Growth Stage
The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale)and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage.
Maturity Stage
The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.
Decline Stage
In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.
Examples
Set out below are some suggested examples of products that are currently at different stages of the product life-cycle:
INTRODUCTION
GROWTH
MATURITY
DECLINE
Third generation mobile phones
Portable DVD Players
Personal Computers
Typewriters
E-conferencing
Email
Faxes
Handwritten letters
All-in-one racing skin-suits
Breathable synthetic fabrics
Cotton t-shirts
Shell Suits
iris-based personal identity cards
Smart cards
Credit cards
Cheque books
We define a product as "anything that is capable of satisfying customer needs. This definition includes both physical products (e.g. cars, washing machines, DVD players) as well as services (e.g. insurance, banking, private health care).
Businesses should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.
The stages through which individual products develop over time is called commonly known as the "Product Life Cycle".
The classic product life cycle has four stages (illustrated in the diagram below): introduction; growth; maturity and decline
Introduction Stage
At the Introduction (or development) Stage market size and growth is slight. it is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product.
Growth Stage
The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale)and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage.
Maturity Stage
The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.
Decline Stage
In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.
Examples
Set out below are some suggested examples of products that are currently at different stages of the product life-cycle:
INTRODUCTION
GROWTH
MATURITY
DECLINE
Third generation mobile phones
Portable DVD Players
Personal Computers
Typewriters
E-conferencing
Faxes
Handwritten letters
All-in-one racing skin-suits
Breathable synthetic fabrics
Cotton t-shirts
Shell Suits
iris-based personal identity cards
Smart cards
Credit cards
Cheque books