Question: Why Is Product Mix Important?

Why do businesses need to manage their product mix?

Concentrating on the product mix help organization to focus on the primary business.

In the process of widening the core business, most companies increase the product lines which divert the attention from the primary business..

What is the importance of the marketing mix?

Identifying and arranging the elements of its marketing mix allows a business to make profitable marketing decisions at every level. These decisions help a business: Develop its strengths and limit its weaknesses. Become more competitive and adaptable in its market.

What is the difference between product mix and product line?

Product Mix vs Product Line A product mix is a group of everything a company sells. … A product line refers to a unique product category or product brand a company offers. For example, Patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc.

What are some risks of adding a new product?

Risks Associated with Product DevelopmentRisk of major delays and economic costs due to belief that high utilization of resources improves performance. … Increasing costs as a result of processing work in large batches. … Risk of losing opportunities by “sticking” to a single development plan. … Risk of starting a product development task too soon.More items…

What is product mix and why is it important in the organization?

Your product mix is important in determining the image of your business and brand, as it helps you to maintain consistency in the eyes of your target market. For instance, if you’re a discount retailer, your target market likely consists of economy-minded shoppers looking for low prices.

What are the 5 product mix pricing situations?

Five product mix pricing situationsProduct line pricing – the products in the product line.Optional product pricing – optional or accessory products.Captive product pricing – complementary products.By-product pricing – by-products.Product bundle pricing – several products.

Why is product management important?

Product Management guides the company on how to invest its limited resources to deliver competitive products that are in line with market needs and then works with other teams to better enable them to help the company reach business goals. … Product Management is the voice of the market inside the company.

What are the three elements of price mix?

Price (Mix): The combination of different ‘price related variables’ chosen by a firm to fix the price of its product is called Price Mix. Price related variables include pricing objectives, cost of product, competitor’s price, profit margin etc. Price is the amount of money customers have to pay to obtain the product.

How can product mix be improved?

4 Ways to increase business with Product Mix DecisionsAdd new product lines à widen the product mix. … Lengthen the existing product lines. … Add more versions of each product à Deepen the product mix.Make product lines more consistent (or less).

What are the 3 product mix strategies?

The major alternative product mix strategies (given by William Stanton and others) have been discussed briefly as under:Expansion of Product Mix: … Contraction of Product Mix: … Deepening Product Mix Depth: … Alteration or Changes in Existing Products: … Developing New Uses of Existing Products: … Trading Up: … Trading Down:More items…

What are the 3 components of a product?

A product is said to have three components:Core Benefits. The core product itself is the benefit the customer receives from using the product. … Actual Product. The core benefits are offered through the components that make up the actual product the customer purchases. … Augmented Product.

What is product mix in simple words?

Product mix, also known as product assortment or product portfolio, refers to the complete set of products and/or services offered by a firm. A product mix consists of product lines, which are associated items that consumers.

What are two main sources of new product ideas?

Sources of new product ideas include company employees, customers, competitors, outside inventors, acquisitions, and channel members. Both solicited and spontaneous ideas may emerge from the sources, and some even occur by accident.

What are the benefits of product mix?

The primary advantage of a product mix is to give the company more opportunities to reach customers. and broaden the current products, as seen at Small Business Marketing Plans. Many products in a product mix are related, so customers may feel an affinity for the brand and will purchase similar products.

What is product mixing?

Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products.

What are the factors affecting product mix?

Product Mix: Top 10 Factors Affecting Product MixProfitability: Every business unit tries to maximize its profits. … Objectives and Policy of Company: Company frames its product mix to achieve its objective. … Production Capacity: ADVERTISEMENTS: … Demand: … Production Costs: … Government Rules and Restriction: … Demand Fluctuation: … Competition:More items…

How do you manage a product?

Product management is an interdisciplinary role that reaches across teams to plan, design, and continuously bring better products to market. The role evolved out of a set of responsibilities that traditionally fell to lead developers and engineers: scoping out user problems and making critical product decisions.

What is product line and example?

For example, a cosmetic company that’s already selling a high-priced product line of makeup (that might include foundation, eyeliner, mascara, and lipstick) under one of its well-known brands might launch a product line under the same brand name but at a lower price point.