Product Mix Decisions

Last Updated on Sun, 06 Aug 2023 | Customer Relationships

An organization with several product lines has a product mix, A product mix (or product portfolio) consists of all the product lines and items that a particular seller offers for sale. Some companies manage very complex product portfolios. AFor example, Sony's diverse portfolio consists of four primary product businesses worldwide: Sony Electronics, Sony Computer Entertainment (games), Sony Pictures Entertainment (movies, TV shows, music, DVDs), and Sony Financial Services (life insurance, banking, and other offerings).

Each major Sony business consists of several product lines. For example, Sony Electronics includes cameras and camcorders, computers, TV and home entertainment products, mobile electronics, and others. In turn, each of these lines contains many individual items. Sony's TV and home entertainment line includes TVs, DVD players, home audio components, digital home products, and more. Altogether, Sony's product mix includes a diverse collection of hundreds and hundreds of products.

A company's product mix has four important dimensions: width, length, depth, and consistency. Product mix width refers to the number of different product lines the company carries. Sony markets a wide range of consumer and industrial products around the world, from TVs and PlayStation consoles to semiconductors. Product mix length refers to the total number of items the company carries within its product lines. Sony typically carries many products within each line. The camera and camcorder line, for instance, includes digital cameras, camcorders, photo printers, memory media, and tons of accessories.

Product mix depth refers to the number of versions offered of each product in the line. Sony has a very deep product mix. For example, it makes and markets about any kind of TV you'd ever want to buy—tube, flat panel, rear projection, front projection, HD or low resolution—each in almost any imaginable size. Finally, the consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. Within each major business, Sony's product lines are fairly consistent in that they perform similar functions for buyers and go through the same distribution channels. Companywide, however, Sony markets a very diverse mix of products. Managing such a broad and diverse product portfolio requires much skill.

These product mix dimensions provide the handles for defining the company's product strategy. The company can increase its business in four ways. It can add new product lines, widening its product mix. In this way, its new lines build on the company's reputation in its other lines. The company can lengthen its existing product lines to become a more full-line company. Or it can add more versions of each product and thus deepen its product mix. Finally, the company can pursue more product line consistency—or less—depending on whether it wants to have a strong reputation in a single field or in several fields.

Product Mix Decisions
Product mix decisions: Sony has a large and diverse product portfolio, divided into four primary product businesses, each containing hundreds of products. "Welcome to the world of Sony."

Author I a brand represents Comment | everything that a product or service means to consumers. As such, brands are valuable assets to a company. For example, when you hear someone say "Coca-Cola," what do you think, feel, or remember? What about "Harley-Davidson"? Or "Google"?

Branding Strategy: Building Strong Brands (pp 259-268)

Some analysts see brands as the major enduring asset of a company, outlasting the company's specific products and facilities. John Stewart, former CEO of Quaker Oats, once said, "If this business were split up, I would give you the land and bricks and mortar, and I would keep the brands and trademarks, and I would fare better than you." A former CEO of McDonald's declared, "If every asset we own, every building, and every piece of equipment were destroyed in a terrible natural disaster, we would be able to borrow all the money to replace it very quickly because of the value of our brand. . . . The brand is more valuable than the totality of all these assets."18

Thus, brands are powerful assets that must be carefully developed and managed. In this section, we examine the key strategies for building and managing brands.

Dewalt Wedding

Consumers sometimes bond very closely with specific brands. Jokes the bride at this wedding: "He loves DeWalt nearly as much as he loves me."

Brand equity

The differential effect that knowing the brand name has on customer response to the product or its marketing.

Continue reading here: Building Strong Brands

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Readers' Questions

  • robert
    What is product width?
    1 year ago
    • Product width is a measurement used to describe the horizontal dimension of a product, such as a desk, chair, or appliance. It is typically measured in inches, centimeters, or millimeters.
    • crescente
      What are consumers and industrial products mix decision?
      1 year ago
      • Consumers and industrial products mix decisions involve a strategic approach to pricing, product placement, and marketing. This decision is based on understanding the target market and the competitive environment. The goal is to optimize revenue by providing products and services that meet customer needs while achieving profitability. The decision may involve investing in product development, creating a well-rounded portfolio of products and services, and using promotional activities to reach the right audiences. Additionally, the mix decision involves making sure pricing is competitive and appropriate for each market segment, and that distribution channels are sufficient for the company to adequately serve its customers.
      • SUSAN
        What is diverse product mix?
        1 year ago
        • A diverse product mix refers to a marketing strategy in which a company offers several different products within the same business category. This may include different varieties of a product, different features and different price points. Companies may use diverse product mixes to appeal to a wider range of customers, increase sales and generate higher profits. By offering a range of products, organizations can target different customer groups, attract new customers, and increase the overall demand for their products.
        • gustavo
          How the company can increase it business through product mix decisions?
          1 year ago
          1. Introduce new products: To increase its business, the company should introduce new products to the market that are aligned with the demands of the customers. This can help it capture new markets, increase customer satisfaction and increase sales.
          2. Invest in quality: Investing in quality products is essential to ensure the company stands out from the competition. It should focus on offering high-quality products that are reliable and affordable.
          3. Expand into new markets: Expanding into new markets can help the company reach new customers and increase its profits. This can be achieved through strategic partnerships, online marketing and other methods of promotion.
          4. Utilize customer feedback: Gathering feedback from customers can be a great way to understand what customers want and what their needs are. This information can be used to develop new products and improve existing ones.
          5. Focus on customer service: Providing excellent customer service is essential to ensure customers are satisfied and remain loyal to the company. The company should offer helpful advice, answer queries quickly and provide follow-up services.
          • Selassie Semere
            How company can increase through product mix decision?
            1 year ago
            1. Increase Product Variety: Companies can increase their profits by introducing a wide range of products. By offering an assortment of product types, companies can attract new customers and increase sales.
            2. Focus on Niche Markets: Companies can focus on underserved niche markets to gain a competitive edge. Offering products tailored to specific consumer needs can help a business stand out from the competition.
            3. Offer Complementary Services: Many products can benefit from additional services. For example, a tech company could offer repair and tech support services to clients.
            4. Personalize Packages: Companies can create customizable product packages according to a customer’s preferences. This will help customers feel that their needs are being met and make them more likely to purchase.
            5. Introduce Add-Ons: Companies can sell product add-ons to their existing customers. This can be done through discounts and freebies that customers can add to their order.
            6. Bundle Products Together: Bundling products together can increase sales. Companies can offer discounts and incentives when customers buy multiple products at once.
            7. Implement Loyalty Programs: Loyalty programs are a great way to engage customers and keep them coming back. Companies can offer discounts and rewards to customers who purchase their products frequently.
            • mellisa busby
              Why might a company pursue a strategy of less product line consistency?
              1 year ago
              • A company may choose to pursue a strategy of less product line consistency in order to stay competitive in the market. By offering a variety of products that meet different needs, a company can expand its customer base and attract new customers. They may also use this approach to differentiate themselves from the competition and establish a unique brand identity. Additionally, having a diversified product line allows them to take advantage of shifts in consumer preferences and offer products that meet the changing demands of their customers.
              • Ines
                How to comment on product mix decision?
                1 year ago
                • As a customer, it is important to understand how a company's product mix decision can impact their overall success. It is important to provide feedback to the company on how their product mix decisions align with the customer's needs and expectations. By providing input on how their decisions are affecting the customer experience, feedback can be used to help the company understand how their decisions are affecting their profits. Additionally, feedback can provide insight on what products and services customers would like to see introduced to the mix in order to ensure satisfaction.