What is a product mix?
Product Mix refers to a company’s entire line of products and services. A product mix comprises product lines, which are related items that customers are likely to use together or consider similar products or services. The product mix is also known as product assortment or product portfolio.
The term “product mix” refers to the whole set of products or services that a company provides. These items or services are typically bundled together within product lines, representing the various types of available products.
The Benefits Of A Product Mix
Comprehending and implementing the concept of a product mix can benefit your company in various ways. Maintaining a well-maintained product mix will provide the following benefits:
● Respond to the requirements of customers
● Offering a broad selection of items allows your company to meet the needs of a more significant number of customers without losing sales to your competitors’ offerings. If your company’s products can meet all of a customer’s requirements, that consumer will repeatedly come, confident that you have precisely what they require.
For example, in The Coca-Cola Company’s case, they have their iconic Coca-Cola brand, including original Coca-Cola, Diet Coca-Cola, Coke Zero, Cherry Coke, and other flavors. A product line would be appropriate here, but their product mix would include their Coca-Cola, Dr. Pepper, Glaceau Smartwater, Sprite (and so on) product lines.
Improve your company’s image
The product mix of your company is a critical aspect in determining the image of your company. Maintaining a consistent and recognizable product mix will assist your clients in understanding what you do as a business and what they can anticipate from you.
Make a point of concentrating.
The product mix concept allows you to remain focused on your key business objectives. As your company grows, it’s only natural to desire to broaden your product offerings to reach a more significant number of clients. However, by doing so, you run the risk of alienating your current clients by offering products or services that only a tiny percentage of the population genuinely requires.
Management of inventories
Inventory management is complex for any firm, but it is considerably more difficult for a small one. Given the limits imposed by being a smaller business on the number of items you may offer, it’s critical to maintain a healthy product mix that represents your key clients’ needs and needs. This assists your customer, but it also means that you will have less wastage when it comes to inventory management because you will only be storing the product currently being sold.
Product Mix Components
The product mix of a corporation is composed of three major components.
Product mix vs. Product item
In the context of an organization’s products, a product item is a specific product version that can be defined as a distinct offering among those items. To put it another way, while the Coca-Cola Company has a product mix, and the Coca-Cola labeled things would be considered a product line, a single can of Coca-Cola is regarded as a single item of merchandise.
Market Mix – Who Is it for?
Small businesses often begin with a product mix that is restricted in breadth, depth, and length and has a high level of consistency. However, the corporation may decide to distinguish its goods or buy new ones to reach new markets in the future. They may also add identical goods of better or lesser quality to their ranges to provide varied options and pricing points.
This is referred to as product line stretching. It’s termed upward pushing when you add higher-quality, more costly things. When you add lower-quality, lower-priced items, this is downward stretching.
How to Create a Product Mix
Expanding a product mix successfully can assist a company in adapting to changing consumer demand/preferences while decreasing product risk and reliance on a single product or product line. This, in turn, results in significant earnings for the company. On the other hand, flawed product mix expansion can harm a company’s brand image and profitability.