I’ve selected the subject Product Mix from my favourite subject ‘Marketing for Management’ taught by Dr. Ajay Bansal. Dr. Bansal is a very cooperative teacher who always helps students understand topics well. His knowledge is not limited to marketing; he has a vast knowledge of other subjects. He explains things in a way that they become easy to understand, and he does this mostly by relating the theory to practical examples that help us understand better.
Now, let’s go on the topic of Product Mix.
What is Product Mix?
The product mix is all the products that a company offers to the customers. It includes all product lines of the company. A product line is those products that are similar in functionality or, in other words, all belong to the same category. Let’s take the case of Hindustan Unilever, where product lines for personal care, home care, and food & beverages are found.
The product mix of a company can be described through four major dimensions:
Width: This is the number of different product lines a company offers. For example, if a company like Nestlé sells dairy products, cereals, beverages, and pet care items, then the width of its product mix is four.
Length: The absolute number of products that a firm has in all its product lines. Thus, if Nestlé has five dairy products, four cereals, and three beverages, the length of its product mix is twelve.
Depth: The various forms of each type in the line – different sizes, flavors, or colors. Many varieties of Coke are sold by Coca-Cola-from Diet Coke to Coke Zero and all flavors of Coke.
Consistency: This indicates how close two product lines are in terms of usage, production, or distribution. A company with high consistency may offer products falling into the same product category-for example, sporting brand selling shoes, clothes, and accessories.
Why is the Product Mix Important?
A well-managed product mix is very important for a company’s health. Here’s why:
Meeting Diverse Customer Needs: A diversified product mix helps to attain a diverse range of customers. For example, Procter & Gamble can offer a variety of products, like skin care, hair care, and cleaning products, so that it is accessible to diverse kinds of customers.
Risk Reduction: A company having more products will not risk the business if the selling line of products is not working. Other products will compensate for that failure of other product lines
Increasing Revenues: The larger product mix allows a firm to generate more revenues than it would have generated through smaller product mix. For example, the revenues Apple generates is not only from the sale of iPhones but also from the sale of iPads, Mac Books, Apple Watches, and many more.
Helps in differentiating products: Diversification of product mix helps a company stand out in the market. More the products a company offers, the more it can meet different needs for the customer and improve its presence in the market compared to other competitors.
Promote Growth: Addition of product mix can grow the companies and keep them relevant. Selling new or different products than what is already in the market keeps the brand fresh and current in the market. Samsung keeps growing with the latest versions of its smart phones, TVs, etc.
A good example of a company with a great product mix is Hindustan Unilever, one of India’s largest fast-moving consumer goods companies. It offers different products in many categories such as:
Personal Care: Soaps like Lux, Dove, and Lifebuoy.
Home Care: Detergents like Surf Excel, Rin, and Wheel.
Food & Beverages: Brands like Kissan (jams), Knorr (soups), and Brooke Bond (tea).
This wide product mix helps Hindustan Unilever satisfy all the different customer segments and stay on top of the market.
Conclusion
The product mix is important for any company’s marketing plan. It helps businesses make more profits by offering a variety of products that can target various customers. By doing this, they also reduce risks and grow by providing more choices. Knowing how to manage the product mix well is important to stay and succeed in the competitive market. It’s not just about having more products, but about offering the right products that meet the needs of various customers.