Product Mix Decisions Presentation
Slide 1 - Product Mix Decisions by eNotesMBA
Slide 2 - Meaning of Product Mix
Slide 3 - Meaning of Product Mix cont..
Slide 4 - Meaning of Product Mix cont..
- Product Mix Width - The number of product lines in the product mix.
- Product Mix Length - The number of products in a product line.
- Product Mix Consistency - The relatedness of the different product lines in a product mix.
Slide 6 - Characteristics of Product Mix
Slide 8 - Product and Service Strategies
- Individual Product Strategies
- Introduction Strategies,
- Growth Strategies,
- Maturity Strategies, and
- Declining Strategies.
Slide 9 - Product and Service Strategies
- Product Line Strategies
- Upward Stretch Strategies,
- Downward Stretch Strategies,
- Two-way Stretch Strategies,
- Line Filling Strategies, and
- Contraction Strategies.
Slide 10 - Product and Service Strategies
- Branding Strategies,
- Add New Product lines,
- Delete Existing Product lines.
Slide 11 - Individual Product Strategies
Slide 12 - The Diffusion Process
- Attract customers by raising awareness and interest
- Induce customers to try and buy
- Engage in customer education activities
- Strengthen or expand channel and supply relationships
- Build on availability and visibility
- Set pricing objectives
Slide 16 - Growth Stage of PLC
Be ready for sustained sales increases
Rapid increase in profitability early in the growth stage that decreases at the end of this stage
Length depends on nature of product and competitive reactions
Slide 17 - Growth Stage of PLC Cont…
Marketing strategy goals in this stage:
- Leverage the product’s perceived differential advantages
- Establish a clear product and brand identity
- Create unique positioning
- Maintain control over product quality
- Maximise availability of the product
- Maintain or enhance the product’s profitability to partners
- Find the ideal balance between price and demand
- Keep an eye focused on the competition
Slide 18 - Maturity Stage of PLC
Few, if any, new firms will enter the market
Still an opportunity for new product features and variations
Slide 19 - Maturity Stage of PLC Cont…
Four general goals in this stage:
- Generate Cash Flow
- Hold Market Share
- Steal Market Share
- Increase Share of Customer
- Develop a new product image
- Find and attract new users to the product
- Discover new applications for the product
- Apply new technology to the product
Slide 20 - Declining Stage of PLC
- Attempt to postpone the decline
- Accept its inevitability
- Market segment potential
- The market position of the product
- The firm’s price and cost structure
- The rate of market deterioration
Slide 21 - Product Line Strategies
- To increase the length of a product line
- To decrease the length of a product line
Slide 22 - Increasing The Product Line
- Downward Stretch – A downward-stretch strategy is an attempt to add products to the lower end of the product line. Luxury car makers are introducing lower-priced cars to get new customers.
- Upward Stretch – An upward-stretch strategy is just the opposite: Products are added at the higher end of a product line. This has been a favourite approach for Japanese companies in the U.S. market
Slide 23 - Increasing The Product Line Cont…
- Two-way Stretch – A two-way-stretch strategy entails adding products at both the high and low ends of the product line. Firms that have focused on the mass market might use this strategy to appeal to both price conscious and luxury-seeking consumers.
- Line-filling – A line-filling strategy involves adding products in different places within a product line. A firm might use this strategy to fill gaps in its product line that are not at the high or low end.
- Cannibalisation - Cannibalisation occurs when a new product takes sales away from existing products. A great deal of cannibalisation shifts sales from one product to the new product, with little overall gain for the firm.
Slide 24 - Increasing The Product Line Cont…
- Line Modernisation – update to reflect current trends, themes
- Line Featuring - select one or a few items in the line to feature
- Line Pruning – select item(s) to cut
Slide 25 - Decreasing The Product Line
Product Line Contraction
- They are not successful.
- They reach the decline stage of PLC.
- Long product line marketing costs are too high.
Slide 26 - Product-Mix Strategies
- Product Mix is the set of all products and items that a particular seller offers to buyers.
- The Product Mix consists of all product lines and individual products marketed by the firm.
- Product Mix Decisions include selection of width, length, depth, and consistency
Slide 27 - Product-Mix Strategies Cont.
- Add new product lines
- Delete existing product lines
- Branding Strategies