1. Product: A product is anything which is capable of satisfying customer needs. When a customer looks at what the customer is buying, it is essentially a service whether the means is tangible or intangible. Product Mix: This is the total set of brands marketed by a company. The width of product mix is the number of product lines that a company offers. Companies increase the width of their product mix to spread their risk across many product lines rather than depend on one or a few of them. They also widen their product mix to capitalize on their established brand equity. Product line: This is a group of product items or brands that are closely related in terms of their functions and benefits they provide. Managing brands and product lines are key elements of the product strategy. Product Mix Modifications: A company’s product mix is never static. Customers’ preferences change, new customer segments emerge, and company’s competencies and priorities change. All these changes warrant a change in a company’s product mix. CONTD…….
2. Product Mix expansion: Product mix expansion is achieved by increasing the depth within a particular product line, i.e. new brands or variants of existing brands are added to the product line and/or by increasing the number of product lines. Line Extension: When a company adds a similar item to an existing product line with the same brand name it is called line extension. A company resorts to line extension to appeal to more market segments by offering a wide range of options of flavours, colour, size, etc. for a particular product. Mix Extension: New product lines are added to the company’s present assortment. The new lines may be related or not related to the current product. The company can use one of the existing brand names or may give an entirely new name to the new product lines. When the company uses one of its existing brands to offer a new product line, it is called brand extension. Trading up: A company adds a higher priced product to a product line to add prestige to the line and attract a broader market. The company hopes that the new product prestige will help the sale of lower priced products. CONTD…….
3. Trading Down: A company adds a lower priced product to its product line. The company wants to attract customers who cannot afford the original lower priced products or who find the current products too expensive. Product mix Contractions: Product mix contraction is achieved either by eliminating an entire product line or eliminating a few product items or brands from within a line. The idea is to weed out low-profit and unprofitable product items or product lines and earn higher profits from fewer products. Repositioning: This involves changing customers’ perception of a brand. It involves changing the product’s attributes and communication to the customer. Product Modification: Product modification will involve changing the quality levels of the product item to make it more appropriate for the target market, functional modifications to reflect changing customer requirements and to incorporate latest technologies, and style modification to appeal to customers’ emerging aesthetic concerns. Planned obsolescence: This is the practice of modifying products so that those that have already been sold become obsolete before they actually need replacement. The modified product is substantially different and better than the earlier versions, and customers who possess the earlier versions feel disadvantaged or unfashionable.
