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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.
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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.
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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.
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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.
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Characteristics of Product Mix
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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.
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Individual Product Strategies
 Introduction Strategies,
 Growth Strategies,
 Maturity Strategies, and
 Declining Strategies.
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Product Line Strategies
 Upward Stretch Strategies,
 Downward Stretch Strategies,
 Two-way Stretch Strategies,
 Line Filling Strategies, and
 Contraction Strategies.
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Product Mix Strategies
 Branding Strategies,
 Add New Product lines,
 Delete Existing Product lines.
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Individual Product Strategies
Product Life Cycle (PLC)
Describes the advancement of products through
identifiable stages of their existence.
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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.
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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
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Marketing Strategies During PLC
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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 www.eNotesMBA.com

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
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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
 Maximize 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
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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
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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
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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:
Market segment potential
The market position of the product
The firm’s price and cost structure
The rate of market deterioration
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Product Line Strategies
Strategic Alternatives
1. To increase the length of a product line
2. To decrease the length of a product line
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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 favorite approach for
Japanese companies in the U.S. market
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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.
 Cannibalization - Cannibalization occurs when a new
product takes sales away from existing products. A great
deal of cannibalization shifts sales from one product to the
new product, with little overall gain for the firm.
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Increasing The Product Line Cont…
 Line Modernization – 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
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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.
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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
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Product-Mix Strategies Cont.
 Add new product lines
 Delete existing product lines
 Branding Strategies
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Product-Mix Branding Strategies
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Branding Decisions
 Branding Decisions
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