Product line and product mix decisions.

Product line decisions.

A product line is a group of products that are closely related because they function in a similar
manner, are sold to the same customer groups, are marketed through the same types of outlet, or
fall within given price ranges. For Example, HUL in India is having different product line like laundry,
personal care, etc.

Product line length.

Product line managers have to decide on product line length. Product line length is influenced by
company objectives. Companies that want to be positioned as full-line companies, or that are
seeking high market share and market growth, usually carry longer lines.

A different objective is to create a product line that facilitates cross-selling: Hewlett-Packard sells
printers as well as computers. Still another objective is to create a product line that protects against
economic ups and downs; Electrolux offers white goods such as refrigerators, dishwashers, and
vacuum cleaners under different brand names in the discount, middle-market, and premium
segments, in part in case the economy moves up or down.

Over time, product line managers tend to add new products either to use up excess manufacturing
capacity, or because the sales force and distributors are calling for a more complete product line to
satisfy their customers, or because the firm needs to add items to the product line to increase sales
and profits. A company lengthens its product line by two ways: line stretching and line filling.

Line Stretching.

Each and every marketer’s product line covers a only a certain portion of total possible range. For
example, Audi in India is selling its product only to the upper class market. Line stretching is said to
be done when a company lengthens its product line beyond its current range. The option lies with
company to which side it want to stretch. It can stretch downside, upside or both also.

Downside stretch.

A company offering middle class or upper class product line to current market may offer a
new product line to the lower market also. Downward stretching occurs when a company
that is located at the upper end of the market later stretches its lines downwards.

The firm may have first entered the upper end to establish a quality image and intended to
roll downwards later. It may be responding to an attack on the upper end by invading the
low end.
 A company may have so many choices to go for downward stretch in the market.
 Opportunity of strong sales growth
 It can be used as a counter attack on competitors whenever strategically used.
 When opportunity in the current(middle and upper) is less.
In stretching downwards, the company faces some risks. The low-end item might provoke
competitors to counteract by moving into the higher end. The company's dealers may not be
willing or able to handle the lower-end products or the move may confuse the customer.

Upward Stretch.

Companies at the lower end of the market may want to enter the higher end. They may be
attracted by a faster growth rate or higher margins at the higher end, or they may simply
want to position themselves as full-line manufacturers.

An upward stretch decision can be risky. The higher-end competitors not only are well
entrenched, but also may strike back by entering the lower end of the market. Prospective
customers may not believe that the newcomer can produce quality products. Finally, the
company's salespeople and distributors may lack the talent and training to serve the higher
end of the market.

Two way stretch.

Companies in the middle range of the market may decide to stretch their lines in both
directions. Sony did this to hold off copycat competitors of its Walkman line of personal tape
players. Sony introduced its first Walkman in the middle of the market. As imitative
competitors moved in with lower-priced models, Sony stretched downwards. At the same
time, in order to add lustre to its lower-priced models and to attract more affluent
consumers keen to trade up to a better model, Sony stretched the Walkman line upwards.

Line Filling.

Rather than stretching into lower- or higher-end segments, the firm can lengthen its product line by
adding more items within the present range of the line. There are several reasons for product line
filling: reaching for extra profits, trying to satisfy dealers, trying to use excess capacity, trying to be
the leading full-line company, and trying to plug holts to keep out competitors.

Product mix decisions.

A product mix (also called a product assortment) is the set of all products and items a particular
seller offers for sale. A product mix is the assortment of product lines and individual offerings
available from a marketer. Its two primary components are product line (a series of related
products) and individual offerings (single products). Product mixes are assessed in terms of length,
width, depth and consistency. For example, an organization's product mix consists of tobacco
products, biscuits products and cosmetic products.

The length of a product mix refers to the total number of items in the mix. We can also talk about
the average length of a line. This is obtained by dividing the total length by the number of lines or an
average product length.

The width of a product mix refers to how many product lines the mix has. For example, if an
organization sells cosmetics, food products and bathing products, the width of the product mix is
three i. e. cosmetics, food products and bathing products.

The depth of the product mix refers to variants are offered of each product in the line. If a product
comes in two scents, two formulations and two additives, that product has a depth of eight as there
are eight distinct variants. The average depth of a company’s product mix can be calculated by
averaging the number of variants within the brand groups.

The consistency of the product mix refers to how closely related the various product lines are in end
use, production requirements, distribution channels, or some other way. A company’s product lines
are consistent insofar as they are consumer goods that perform same or similar functions for
consumers and go through the same distribution channels. The lines are less consistent insofar as
they perform different functions for the buyers and go through different distribution channels.