PRODUCT MIX: WHAT IT CONSISTS OF, COSTS AND EXAMPLES - DUDAS - 2025

The mixture of products, also known as product assortment, refers to the total number of product lines a company offers its customers. A company can sell multiple product lines.

It is the set of everything that a company sells. It consists of product lines, which are related items that consumers tend to use together or consider similar products or services. The product line is a subset of the product mix.

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A product line refers to the products that a company offers. For example, Patanjali company deals with different product lines, including shampoo, flour, toothpaste, etc.

These are different product lines for the company and together they make up the company's mix.

Product lines can be quite similar, such as dishwashing liquid and bar soap, which are used for cleaning and use similar formulas. They can also be very different, like diapers and razors.

What does it consist of?

The product mix is ​​a subset of the marketing mix and is an important part of a company's business model. It has the following dimensions:

Width

This dimension corresponds to the number of product lines that a company sells.

For example, suppose the EZ Tool company has two product lines: hammers and spanners. The width of your product mix is ​​two.

Companies generally do not have a broad product line. It is more practical to start with a few commodities and increase market share.

Enterprise technology will allow the company to subsequently diversify into other industries and broaden the breadth of the product mix.

Length

Length is the total number of items in the company's product mix.

For example, EZ Tool has two product lines. The hammer product line includes claw hammers, ball hammers, sledgehammers, roof hammers, and industrial hammers.

The wrench line contains Allen wrenches, socket wrenches, ratchet wrenches, combination wrenches, and adjustable wrenches.

Therefore, the length of the EZ Tool product mix would be 10. Companies with multiple product lines calculate the average length per product line.

Depth

Corresponds to the total number of variations for each product. Variations can include size, flavor, and any other distinguishing characteristics.

For example, if a company sells three sizes and two flavors of toothpaste, that particular line will have a depth of six.

Consistency

It describes how closely the product lines are related to each other, in terms of use, production and distribution.

The smaller the variation between products, the greater the consistency. For example, a company that markets only dairy products has more consistency than a company that deals with all types of electronic products.

A company's product mix can be consistent in distribution, but very different in use. For example, a company may sell nutrition bars and health magazines in retail stores.

However, the product lines of the toothpaste company are both the same. They have the same use, are produced and distributed in the same way. Therefore, these product lines are consistent.

Costs

Pricing is a critical factor in the product mix. Companies must make strategic decisions about how to price their products to achieve their business goals.

Costing strategies range from being the cost leader to being a high-ranking option, with a high price tag for consumers.

-Higher cost

The highest cost is the most basic cost type. It simply represents setting the cost of a product at a higher level than its cost of distribution and production.

For example, a jeweler may make the decision to price his products at a 100% markup, based on the costs involved in creating the product.

-Based on competition

They are costs established specifically to face and respond to the prices placed by the competition for their products.

Companies can make the decision to have a higher price, a lower price or at the same level of the competition. However, their decisions are based on an assessment of what competitors are doing and how they want to position their product mix.

-Anticipated

It is a strategy that is frequently used by new participants in a market, or companies that have developed new products, that have little or no competition.

Set prices high to take advantage of sales that will originate before competitors enter the market.

-Penetration

It is a product mix pricing strategy designed to gain market share by introducing a new product at a low price to entice consumers to try your product.

Even companies can price their products lower to capture a large share of the market.

Examples

Coca Cola

Coca-Cola has under its name product brands such as Minute Maid, Sprite, Fanta, Thumbs up, etc. There are a total of 3,500 products handled by the Coca-Cola brand. These make up the length of the product mix.

Minute Maid juice has different variants, such as apple juice, orange juice, mixed fruits, etc. They constitute the depth of the "Minute Maid" product line.

If a company produces only sodas and juices, it means that their mix is ​​two product lines wide. Coca-Cola deals with juices, soft drinks and mineral water and, therefore, Coca-Cola's product mix is ​​three product lines wide.

Coca-Cola primarily handles beverage products and therefore has more consistency in its product mix.

P&G

Let's take P&G as a company to understand the product mix. This is not an accurate example and all P&G products may not be considered, but the example will help you understand the product mix within an organization.

Detergents: Ariel, Ariel bar, Ariel oxyblue, Tide, Tide white, Tide plus, Tide natural.

Shampoos: Head and shoulders normal, Head and shoulders anti-dandruff, Pantene, Pantene pro-v, Pantene damage repair.

From this example, the following can be learned about the P&G product mix:

- Product mixing width: 2.

- Product mix length: 12.

- Product mixing depth: 7 in detergents and 5 in shampoos.

- Consistency of the product mix: high, since both are cleaning products.

References

1. Rick Suttle (2018). What Is a Product Mix? Small Business - Chron. Taken from: smallbusiness.chron.com.
2. Aashish Pahwa (2018). What is Product Mix? Explanation with Examples. Feedough. Taken from: feedough.com.
3. CFI (2018). Product Mix. Taken from: corporatefinanceinstitute.com.
4. Hitesh Bhasin (2017). Product mix and Product line. Marketing91. Taken from: marketing91.com.
5. Neil Kokemuller (2017). The Elements of Product Mix. Bizfluent. Taken from: bizfluent.com.
6. Leigh Richards (2018). Product Mix Pricing Strategies. Small Business - Chron. Taken from: smallbusiness.chron.com.