The product mix is the collection of all products or items a company offers to its customers. It is also known as product assortment. A company can not just offer a single product to its customers, so it offers a mix of products. A company’s product assortment consists of various product lines that it offers. The figure below depicts various product lines of Hindustan Unilever Limited (HUL).
Product Mix Dimensions
Any company’s product mix has some dimensions which are length, width, depth and consistency which are explained as below.
- Width: It refers to how many different product lines a company has with it. In the above figure, width is 10 which is shown as PL1 (product line 1), PL2, PL3.
- Length: Total number of items in a product mix refers to the length. Length in above figure is 51. Average length: We can find this by dividing the length by total numbers of product lines.
- Depth: Each product in a product line has how many variants is referred to as depth. If Lakme, the product of PL1 has 3 variants (Lakme A, Lakme B, and Lakme C) and is present in two sizes, then Lakme has a depth of 6 ( variants * sizes).
- Consistency: It describes how closely the various product lines of a company are in distribution channels, usage etc. In the above figure, the product lines are consistent because they all are consumer items that go through same channels of distribution.
The above four dimensions of product mix help any company to expand its business in the following 4 ways:
- It can widen its mix by adding new product lines which can help it to build its reputation among other lines
- A company can lengthen its each product line by adding more products and thus becoming a full line company
- It can deepen its mix by adding more product variants
- A company may decide to have strong reputation in single field by pursuing more consistency in product lines or it may decide to build its reputation as a full line company by having less consistency among product lines
Product Mix Decisions:
There are various product mix decisions a company has to take in deciding how many product lines it should have and also items in each line
- Single Product: Most of the companies start off as a single product company
- Multiple Products: A company can have many products. For example, Philips has sound cards and MP3 players
- The system of Products: Some companies has a system of products. Example: Nikon sells a system of products including a camera, lens, and other items.
Product Mix Strategies of Small Companies:
Small companies start with a high product line consistency and limited length, width, and depth. As the time passes a company may decide to differentiate its products or may acquire to new products to enter new markets. A company may decide to cater to new markets with its existing products.