Pdf discrete event simulation des has been used as a design and. Product mix concepts product mix set of all products offered by the company for sale product line a group of related products constitute a product line e. A product mix is whole selection of product lines you offer. A good understanding of product mix is a key element of marketing management. In addition to learning general information about the product mix, youll also learn how some of the strategy.
Strategic mix decisions usually relate to the width of the product mix. Own your analytical findings to fully engage effective product mix as a companywide effort. Productmix decisions using analytical methods such as linear programming lp are. Product line both manufacturers and retailers must decide on width and depth of a product mix. May 22, 2020 the width of the product mix is equal to the number of product lines within a company. Jan 14, 2019 the product mix constitutes not only a single product line but all the products within an organization. Consequently, lp is commonly used to solve for an optimal mix of products that maximizes contribution margin i. Product line, product mix, and product line extensions are terms frequently used to refers to different aspects of the range of products offered for sale by a company. Product line lengththe number of different products a firm sells under a product line.
Pdf productmix analysis with discrete event simulation. Product positioning is a strategic management decision that determines the place a product should occupy in a given market its market niche. There are various decisions which the management of a company should take about products we should sell, different categories of products, different versions of products, etc. The difference between a product item, product line and the product mix product line is vertical, which a firms total product offering designed to satisfy single need for target customers. Themodeldevelopedinthispaper isa single period mathematicalmodel ofa givenproduct line. The alternatives are either a flexible or an inflexible product line. Product mix, branding, packaging, labeling, warranties, customer service. Product mix a companys assortment of product lines and individual offerings product mix widththe number of product lines offered. The breadth of a product mix shows the different kinds of product lines that firm carries.
The product mix, also called product portfolio, is the set of all product lines and items that a company offers for sale. This paper explaines that setup costs have some implications. The product mix of a company involves all of the products that a company has for sale. Product mix analysis how to drive richer product mix. Download as pptx, pdf, txt or read online from scribd.
This dimension of the product mix represents the extent to which the activities of the firm are diversified. Apr 08, 2020 a product mix is a group of everything a company sells. A product line is a group of products that are closely related either because they satisfy a class of need, are used together, are sold to the same customer groups, are marketed through the same type of outlets or fall within given price ranges. Line b has 25% average margin and individual products with margins from 15% to 35%. Product line and product mix have direct relationship. Managing new product and process development, new york.
Trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product. Theory of new product development and its applications intechopen. A diagrammatic explanation of the product mix by taking microsoft. The benefits from having a successful product line is the brand identification from customers. The variables of the model arethe marketingmixelements foreachpro. The product mix is the full list of all products offered for the sale by the company. Product mix of a company is made of all product lines and items.
Product line decisions building a strong product line. More details begin with clicking on the buy now button then to start download click the blue bar that says click here to start download from sendspace this file is a winrar. Jul 23, 20 trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product. Reframing the product mix problem using the theory of. We can differentiate between downward, upward, and 2way. Decisions on a productline level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. Product item a specific version of a product that can be designated as a distinct offering among an organizations products. As mentioned in the previous example, colgate has 3 product lines. 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.
Many companies start as a single product item or product line business. The difference between a product item product line and the. Consisting of the full array of a firms marketplace offerings, the mix is designed in terms of width, depth, positioning and. In modem times on producer or distributor or retailer deals in a single product. Product mix the perfect product must provide value for a customer the chartered institute of marketing, 2009, p. Consumer product convenience product customer usually buys frequently, immediately, and with a minimum of comparison and buying effort shopping product in the process of selection and purchase consumers characteristically compare goods based on suitability, quality, price, and style. Find actionable product mix insights in your data free for 30 days the first step in this entire process is to determine how every other lever price, cost, customer mix, and channel mix affects one another and. Product line depthtotal number of items under each brand in the line in terms of variants, shades, models, pack sizes.
Each product within the structure forms a part of the product mix. This is an application of the, dont put all your eggs in one basket. To appeal to different segments of customers to spread the risk of the business to maximise sales to make a profit this is also known as a. Four important dimensions of a product mix can be identified.
It suggests that theres four elements of a business. A mathematical modeling approach to product line decisions glen. Total number of items in the product mix of the company. Philosophy that makes considerable sense when one views the rapidity with which a single productline can become outmodel or obsolescent and hence unprofitable. Selling more of a higher margin product line does not necessarily improve product mix or vice versa. The width is all about the number of different product lines the company carries. Increasing customization requires flexible investments. In marketing jargon, product lining is offering several related products for sale individually. Jun 27, 2012 set of all product offered for sale by a company. The product mix constitutes not only a single product line but all the products within an organization. Vocabulary a product line is a group of closely related products manufactured and or sold by a business.
Product is defined as anything that is offered to public for purchase by the company. Product management lesson 2 product line decisions and. Thus, product mix means total number of products items offered by the company. Reframing the product mix problem using the theory of constraints john davies and vicky mabin school of business and public management victoria university of wellington wellington new zealand vicky. Primary aim of product mix decisions is sales and profit maximization. For example, patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc. Product mix decision making refers to the decision. Product mix decisions width, length, depth and consistency. A product mix is the set of all product lines and items that a particular seller offers for the sale to buyers. Eliminating existing products items from an established product line due to being obsolete, declining sales, and new product line direction. Abc and the toc is required for the proper modeling of the product mix decisions.
Product marketing in a business addresses five important strategic questions. Selling price positioning can minimize customization costs. A product mix is a number of different types of product. Number of different product lines carries by the company. For example, hmt company produces watches, machines. For example, if a company owns a line of hygiene products and also owns a line of house cleaning products, all of those products together would constitute the product mix for the company. Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. The width of product mix is one of the four dimensions of product mix along with the length. Product mix width is the number of product lines a firm carries. Product mix decision making pmdm definition operations.
In modeling productmix linear programming lp problems, a common assumption is that fixed costs will not change for decisions made within a relevant range in which revenues and costs are linear. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. The complete set of all products a business offers to a market. Product mix strategy and manufacturing flexibility. Product mix is expanded, contracted, or modified depending on following factors. Product mix length is the total number of items in the mix. The basic product policy strategy issues at the product line level cluster around the following questions. The product mix could include several lines of products or individual products that do not fall into a line. Product line product line refers to a group of products that function in a similar manner, sold to the same customer groups via same distribution channels and fall within the same price range product mix product mix is the entire collection or assortment of products or product lines offered by an organisation product line is a group of products that are related to each other in. Managing product line and product mix business market. Line stretching means lengthening the product line beyond the current range.
Reframing the product mix problem using the theory of constraints. Company prefers to introduce more product lines or product items in existing product lines to improve. The marketing mix, or 4 ps as its more commonly known, is one of the oldest yet robust marketing concepts. Product mix this means the range or variety of products sold by a business. Jan 22, 2018 a product mix is defined as the number of product lines that a company sells. Line filling adding a new product within the current range of an incomplete line. After getting a taste of success and with an availability of more resources, companies decide to expand their product line andor introduce newer product lines in consonance with market opportunities or in response to competitors moves. Managing product line and product mix free download as powerpoint presentation.
A product line refers to a unique product category or product brand a company offers. Thus, product line width is a depiction of the number of product lines which a company has. Set a daily goal to positively impact on a customers purchase or a specific product line in general. Before turning to the product mix decisions, we first have to know what the product mix actually is. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important. For example, the fruitprocessing firms line of pie fillings might include apple, cherry and strawberry. The depth of a product mix refers to the number of distinct items in a product line. A product mix is a group of everything a company sells. Nov 08, 2016 learn more about the product mix in the latest lecture from alanis business academy. It makes certain changes in its product mix in a way to realize positive impact on profitability.
Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. Product mix and product line understanding product length. In addition to learning general information about the product mix, youll also learn how some of. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Certainly, the product line is too short if the company could increase profits by adding items to it. Product line depth refers to the number of versions offered of each product in the line. Vocabulary a product line is a group of closely related products manufactured andor sold by a business. The first of the product mix decisions refers to the product mix width. Jan 26, 2019 a product line is just a group of related products from a single manufacturer, like the cars on a dealers lot or the shampoos at your hairdresser. Product mix decisions refer to addition, deletion or modification of product in product mix. Product mix depth refers to the variants broadness and narrowness of a product in product line.
This is done with strategies that determine a target market and an image. Decisions on a product line level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. Pdf a model for product line decisions researchgate. However, the product line is a subset of the product mix. This paper explaines that setup costs have some implications to consider in the product mix decisions. Trading down introducing a low priced product to the prestigious line so as to cater increased demand. Product mix consistency refers to the closeness of different product lines basis end use, production, promotion, distribution, etc. A product line in business is a group of related products under the same. This is where the concept of product mix and product line decisions occur, this. The product mix is made up of both product lines and individual products. The astrocosmo problem considered earlier is an example. Expansion of product line process of adding more products to the line valid only if. Relevant costs in product mix decision making seonmin kim. Companies sell multiple product lines under their various brand.
The goods or services that a company produces must be with regard to the needs and the wants of the consumers and the company must be clear if they are providing what the consumers want from them the chartered institute of. Selling a 15% margin product from line b will create negative product mix, even though line b has higher average margin. In modeling product mix linear programming lp problems, a common assumption is that fixed costs will not change for decisions made within a relevant range in which revenues and costs are linear. Line a has 20% average margin and individual products with margins from 10% to 30%. In addressing this objective, the effectiveness of the integrated model will be evaluated under the artificial production line. Simply, it shows the number of items in the product line.
An organizations value can be enhanced by continually improving how it meets the needs and wants of its customers. Having a broad productmix also spreads the risk of failure over a great number of product lines. This means nothing else than the number of items in a product line. A product mix is defined as the number of product lines that a company sells. Learn more about the product mix in the latest lecture from alanis business academy. An organization is required to bring changes in product mix to make it adaptable according to the needs of consumer. The primary one of the product line decisions is the product line length. Every product line has its own distribution of margins, by product. How a product mix can be used to enhance the value of a.
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