The overall number of product lines that are offered to its customers by a company is called Product mix. Product Mix is also known as a product assortment. Length, Width, Depth and Consistency are the four major dimensions of product mix.
Width: Number of Product Lines
The overall number of product lines that a company offers to its customers is the width or breadth of the company’s product mix.
Example – If a company sells watches and sunglasses as its only products, the product mix width of the company is two.
Start-up and small scale businesses generally have a narrow product mix. Building market share by starting with a basic range of products is a more practical business approach. The company may later expand into other industries on the basis of the company’s technology and build the width of its product mix.
Length: Total Products
The length of a product mix is the overall number of articles or products in the company’s product mix.
Example – If a watch and sunglass company sells only aviators and wayfarers in its sunglass line and only analogue and digital watches in its watch line, the product mix length of the company would be four
Depth: Product Variations
The overall number of variations for each product in a product mix is known as its depth. Size, colour, flavour and other major features of a product may be the variations mentioned.
Example – If a sunglass company sells medium and large sunglasses (size) and in three shades each (colour), the depth of the product mix will be 6 (2X3).
Example – Durex and Dettol are both sold in retail stores by a company called Reckitt Benckiser. But the uses of both the products vary vastly. Since the consistency of the products with respect to production vary, the product mix of the company is not consistent.
Apple (Product Mix)
- iPhone SE
- iPhone 8
- iPhone x
- iPhone XR
- iPhone XS
- iPhone 11
- iPhone 11 Pro
5. Wireless Handsfree
A certain part of a company’s total product range is covered by its various product line.
A company elongates its product line in
- Both ways
In such cases where the product line length exceeds its original range, line stretching occurs.
The reasons for which a company in the middle market might want to introduce a more affordable line might be:
- The company might find big growth opportunities by selling more affordable goods. (Example: Walmart)
- The company might want to compete with lower-end competitors who may be trying to move up-market. (Example: If a low-end competitor attacks the company, the company might retort by entering the low-end of the market.)
- The company might notice a lack of growth or a decline in the middle market. A company might stretch in a down market way by either using its current brand name or by completely changing its brand name and building brand equity from nothing but a scratch.
Companies in the middle market may find growth opportunities by entering the high end of the market, profit more by it or simply want to announce and place themselves as full-line manufacturers.
Some companies may completely change their brand name in order for the consumers to allow them to stretch upward. This might not have been possible with the initial product line.
Audi Q7 and Audi A8
iPhone 11 Pro
3. Both Ways [Two Way Stretch]
Companies might stretch both in down- market and up-market directions. This happens when a company wants to cover the entire market and decides to establish its brand in both the premium as well as economic segments of the market. A brand is free to do so if it thinks it needs to launch both premium and low-cost products for the varied masses.
It is very common in big brands to build up brand architecture by covering both segments in the market. This gives them increases revenue and turnover.
- Giorgio Armani – High End
- Emporio Armani – Mid Range’
- Armani Exchange – Affordable Range
Line Modernisation is the strategy used to relaunch existing items in a product line after adjusting and modifying them to match modern needs and taste. Modernisation is constant in the fleetingly growing product market.
To make the customers move ahead and buy higher valued items, companies plan improvements to their existing products. A major challenge is to balance the timing of the improvements of a product.
An early improvement might hamper sales and a delayed improvement might give the competition an upper hand in launching their products and building their reputation with more advanced equipment.
1.Microprocessor companies like Intel and AMD
2.Software companies such as Microsoft and Oracle
3.Apple Watch Series 6
4.iOS 14 – The fourteenth and current most major iOS mobile operating system launched by Apple Inc. for iPhones and iPod Touchlines.
Line Pruning happens when a company discontinues a brand or the production of a product due to a low response from consumers or the lack of financial returns. This helps the company concentrate on its best brands or products.
Reasons for Pruning
- Unprofitable: The company might discontinue its product or brand when it does not get financial returns for the same or might be at a loss because of it.
- Drains Resources: Although the product is profitable, it might be hampering the company’s ability to sell other items and make more money.
If more money can be made by selling another product, the company might discontinue making the less profitable one. Redundant: If a company reaches a point where it sells two similar products where the sales are the same, the company might drop one of the products.
Example – Windows Vista
In 2017, Microsoft put discontinued its 10-year old – and often run-down – operating system, Windows Vista.
“Microsoft has provided support for Windows Vista for the past 10 years, but the time has come for us, along with our hardware and software partners, to invest our resources towards more recent technologies so that we can continue to deliver great new experiences,” the company said in a statement on its website.