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PPT - Product Mix Decisions

Product Mix refers to the number of product lines that an organisation offers to its customers. Product line is a group of related products manufactured or marketed by a single company. Such products function in similar manner, sold to the same customer group, sold through the same type of outlets, and fall within a same price range.
Product mix consists of various product lines that an organisation offers. An organisation may have just one product line in its product mix and it may also have multiple product lines. These product lines may be fairly similar or totally different, for example - Dish washing detergent liquid and Powder are two similar product lines, both are used for cleaning and based on same technology; whereas Deodorants and Laundry are totally different product lines.

Product Mix Decisions Presentation

Product Mix Decisions - Presentation Transcript

Slide 1 - Product Mix Decisions by eNotesMBA

Slide 2 - Meaning of Product Mix
Product Mix - Total group of products offered by a company. 
Product Mix is the total assortment of products and services marketed by a company.

Slide 3 - Meaning of Product Mix cont.. 
Product Line - group of closely related product items. 
A product line is a group of individual products that are closely related in some way.

Slide 4 - Meaning of Product Mix cont.. 
An individual product is any brand or variant of a brand in a product line. 
Thus a product mix is a combination of product lines, which are combinations of individual products.  
Slide 5 - Characteristics of Product Mix 
  • 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 

Product Mix of HUL

Slide 7 - Product and Service Strategies 
Marketing firms dealing in multiple products or services have to device strategies for individual products, specific product lines, and the overall 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 
Product Mix Strategies 
  • Branding Strategies, 
  • Add New Product lines, 
  • Delete Existing Product lines.

Slide 11 - Individual Product Strategies 
Product Life Cycle (PLC) 
Describes the advancement of products through identifiable stages of their existence. 
Product Life Cycle - Individual Product Strategies

Slide 12 - The Diffusion Process 
When a new product is first introduced to the market, consumers go through a process in determining whether to adopt it. The diffusion process describes the adoption of an innovation over time. 

Diffusion Process

Slide 13 - PLC Stages and Characteristics 
Marketers face a different situation at each stage of Product Life Cycle. The diffusion process and competition bring difference at each stage of PLC 

Product Life Cycle Stages and Characteristics

Slide 14 - Marketing Strategies During PLC 

Marketing Strategies During Product Life Cycle

Slide 15 - Introduction Stage of PLC
Begins when development is complete 
Ends when customers widely accept the product  
Marketing strategy goals during this stage:
  • 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
Two strategies: 
1) Establish a strong, defensible marketing position
2) Achieve financial objectives

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 
Typically the longest stage in the product life cycle

Slide 19 - Maturity Stage of PLC Cont…
Four general goals in this stage: 
  1. Generate Cash Flow 
  2. Hold Market Share 
  3. Steal Market Share 
  4. Increase Share of Customer
Four options to achieve these goals: 
  1. Develop a new product image 
  2. Find and attract new users to the product 
  3. Discover new applications for the product 
  4. Apply new technology to the product

Slide 20 - Declining Stage of PLC
Two options: 
  1. Attempt to postpone the decline 
  2. Accept its inevitability
  • Harvesting
  • Divesting
Factors to be considered during this stage: 
  1. Market segment potential 
  2. The market position of the product 
  3. The firm’s price and cost structure 
  4. The rate of market deterioration

Slide 21 - Product Line Strategies 
Strategic Alternatives 
  • To increase the length of a product line
  • To decrease the length of a product line

Slide 22 - Increasing The Product Line
Line stretching
  • 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 
Firms must consider deleting products when:
  • 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  
Slide 28 - Product-Mix Branding Strategies 

Product Mix Branding Strategies
Slide 29 – Branding Decisions 
Branding Decisions 

Branding decisions - Brand Name and Product Category

Slide 30 – Thank You Visit eNotesMBA for More Presentations

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