Product Mix: Explanation, Importance & Examples
Ever wonder what a product mix is? Well, in simple terms, a product mix is an assortment of product lines offered by a brand. This may sound a little confusing at first but the concept is fairly simple to understand once you read up on some examples. (And that’s exactly what we’ll be discussing in this blog.)
Product Mix Definition
As mentioned earlier, a product mix is the total number of product lines offered by a company to its customers. For instance, Johnson & Johnson has numerous product lines that include skin care, child care, and pharmaceutical products etc. here, the product mix would be a combination of all these product lines.
Importance of a Product Mix
Now you’re probably wondering why a product mix is so important. So here’s the thing, organization plays a pivotal role in devising any business model. Creating a product mix not only establishes a good reputation for the company but also caters the needs of its customers.
Focusing on the product mix enables companies to divert all their attention on their primary business. As the company grows, it is likely to expand its product line to widen its core business.
Product Mix Explained
The product mix is a vital component of the marketing mix. It plays an important role in devising the business model of an organization. A product mix has three main dimensions that we’ll be discussing below:
The product width constitutes of the number of product lines a company has to offer to its customers. For instance, a hardware company may have two product lines – wrenches and drills. This would make the product width two.
Most small businesses don’t offer a wide product mix because of lack of funds and resources. If you’re an aspiring business owner or entrepreneur, it’s advisable you start your venture with more basic products and then move your way up to a wide product mix.
Once you start to generate more revenue, you can include more product lines to expand your customer reach. Access to new technology in the future would also allow you to diversify your product line.
The total number of items of products in a company’s product mix is termed as the product length. For example, Colgate’s product line includes toothpaste and toothbrushes which can further be divided into a number of categories. Each individual item would be counted as the product length in this case.
For greater clarity, here’s another example. Suppose you own a tool company that offers two product lines: wrenches and hammers. Now, if your product line includes items such as roofing hammer, ball peen hammers, sledgehammers, ratchet wrenches, pipe wrenches and Allen wrenches, the product length would be 6.
For added convenience, some companies keep track of average product length. Companies with multiple product lines are known to follow this method.
The product depth depicts the variety of products offered by an organization. Its variables may include colors, sizes, level of complexity or practically any other characteristic that may set the product apart.
For instance, suppose you own a toothpaste brand that has a product line that includes three flavors and three sizes. In this case, the product depth of this particular product line will be six.
Again, for added convenience, an organization may calculate the average depth of product lines to aid their business model.
What is a Seasonal merchandise Mix?
A brand’s merchandise mix change according to seasons. For instance, many businesses and retailers like to take advantage of the busy holiday season.
This is an excellent strategy that aims to provide customers more gift-giving options. In the meantime, companies can also use this as an opportunity to experiment with new product lines without having to worry about making a big investment.
Hopefully, this blog post has educated you on what a product mix really is. You can also check out our other marketing posts. Happy learning!
Picture credits: The Daily Meal