Product
Mix
1
Product is . . . . .
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
2
Types of Products
PRODUCTS
Consumer
Products
Services
Industrial
Products
3
Product Mix and Product Line
- A product mix is the set of all products offered for sale by a
company
- The structure of a product mix has both width and depth
- Its width is measured by the number of product lines carried
- Its depth by the variety of sizes, colors, and models offered
within each product line
- A product line is a broad group of products, intended for
essentially similar uses and having similar physical
characteristics
4
Product Items, Lines, and
Mixes
Product Item
A specific version of a product
that can be designated as a
distinct offering among an
organization’s products.
Product Line
A group of closely-related
product items.
Product Mix
All products that an
organization sells.
5
Product Mix and Product Line
Product Mix - Breadth and Depth in a Lawn and Garden Store
6
Gillette’s Product Lines &
Mix
Product Line and Product Mix
Depth of the product lines
Width of the product mix
Blades and
razors
Toiletries
Mach 3
Sensor
Trac II
Atra
Swivel
Double-Edge
Lady Gillette
Super Speed
Twin Injector
Techmatic
Series
Adorn
Toni
Right Guard
Silkience
Soft and Dri
Foamy
Dry Look
Dry Idea
Brush Plus
Gillette’s Product Lines and Mix
Writing
instruments
Lighters
Paper Mate
Flair
Cricket
S.T. Dupont
http://www.gillette.com/
Product-Mix Strategies
- To be successful in marketing, producers and
middlemen need carefully planned strategies for
managing their product mixes
- There are several product-mix strategies:
- positioning the product
- product-mix expansion
- alteration of existing products
- product-mix concentration
- trading up and trading down
8
Product-Mix Strategies
Positioning the Product
- Positioning is (again!) about bringing attention to
products and differentiating them from similar ones
- Several major positioning strategies can be found:
- Positioning in relation to a competitor
- Positioning in relation to a product class or
attribute
- Positioning by price and quality
9
Product-Mix Strategies
Product-Mix Expansion
- Product-mix expansion is accomplished by increasing
the depth within a particular line and/or the numbers of
lines a firm offers to customers
- Line extension: A company adds a similar item to an
existing product line with the same brand name
- Mix-expansion: A company adds a new product line to
its present assortment (the new line may be related or
unrelated to current products, it may also carry one of
the company’s existing brand names or may be given an
entirely new name)
 Brand equity has to be taken into consideration!
10
Product-Mix Strategies
Alteration of Existing Products
- Rather than developing a completely new product,
management might do well to take a look at the
organization’s existing offerings
- Product alteration: Improving an existing product
- Product alteration can be more profitable and less
risky than developing a completely new one
- Eg Lifebuoy +, Zen Estillo New & Improved
11
Product-Mix Strategies
Product-Mix Contraction
- Product-mix contraction: Carried out either by
eliminating an entire line or by simplifying the
assortment within a line
- The intended result of product-mix concentration is
higher profit from fewer products
- As a result, many organizations now have fewer
product lines, and the remaining lines are thinner and
shorter
- Eg Rexona , Maruti 1000
12
Product-Mix Strategies
Trading Up and Trading Down
- The strategies of trading up and trading down involve a
change in product positioning and an expansion of the
product line
- Trading up: Adding a higher-price product to a line in order to
attract a broader market, the new product’s prestige should
help the sale of the existing lower-price products eg Maruti
SX4,
- Trading down: Adding a lower-price product to a company’s
product line, the firm expects that people who cannot afford
the original higher-price product will buy the lower-price one,
Honda Jazz, Skoda Fabia
13
Leveraging Brand Equity
One of the most important changes in the
market is the proliferation of extensions.
Line Extension Strategy
When a brand is used to brand a new product that targets a
new market segment within a product category currently
served by the parent brand.
Examples:
 Coca-Cola diet
 Colgate for Kids
Line Extension Strategies
Product
Sizes
Bisleri
1.1 Ltr
Bisleri
.5Ltr
Bisleri
1.2Ltr
Bisleri
1.5 Ltr
Bisleri
5Ltr
Line Extension Strategies
Colours
Sunsilk
Yellow
Flavours
Kissan
Squash
Orange
Ingredients
Colgate
Herbal
Sunsilk
Pink
Sunsilk
Black
Kissan
Squash
Lemon
Colgate
Gel
Colgate
Namak
Line Extension Strategies
Consumer
Need
Dove
ShampooNormal Hair
Coloured
Essential
Damaged
Hair
Balance
Line Extension Strategies
Form
Vim Bar
Vim Liquid
Vim Powder
Line Extensions
MACH 3 TURBO
Price
PRESTO
Quality
Brand Extension Strategy
Effort to use a successful brand name to
introduce a new product into a different product
category.
Examples:
Nike Shoes: Apparels, Bags, Sunglasses
Park Avenue: Shirts, Shaving Creams, Shirts, Belts,
Perfumes, Soaps & Razors
BRAND STRATEGY DECISIONS
Product Category
Existing
Existing
Brand
Name
New
Line
Extension
Multibrands
New
Brand
Extension
New Brand
Names
Types Of Extensions
• Companion product
• Colgate Dental cream --------- Colgate Tooth Brush
• Gillette Razors -------Gillette Blades
..........Gillette Shaving
Creams--------- Gillette
After Shave
Types Of Extensions
• Customer Need
Johnson's
baby Talc
Johnson's
baby Oil
Johnson's
baby
cream
Johnson's
baby
Shampoo
Johnson's
Nappy
Pads
Types Of Extensions
• Company Expertise
Honda
Cars
Honda
Scooters
Honda
Lawn
mowers
Types Of Extensions
• Brand Distinction
Parashute
Hair Oil
Shampoo
Baby
Soap
Cream
Cooking
oil
Baby oil
Types Of Extensions
Brand Image or Prestige
Steel, Automobile, Heavy Vehicles, Watches, S/ W
Development, Training,
Sub-Branding Strategy
Using a new brand name in conjunction with a
family brand name to introduce new products.
Examples:
• Sony Vaio
• Colgate Total
• Levi’s Dockers
Co-Branding/Brand
Strategies
Alliance
When two or more different brand names are
attached to a product.
Examples:
• Compaq - Intel (“Intel inside”)
• Citibank Jet Privilage card
ccc
Licensing
• Involves contractual arrangements whereby firms can use
names, logos, characters, and other facets of other brands to
market their products.
• Essentially, a firm is “renting” another brand to contribute to
the brand equity of their own product.
Advantage of brand extensions
• Help reduce cost and
speed
of
new
products/brands
• Provide feedback to
the parent brand
• Can
confuse
or
frustrate consumers
Disadvantages of brand
extensions
Retailers may resist
Damage to parent brand image
Reduce sales of parent brand
Reduce identification of brand with any one
category
• Can dilute brand meaning
• Company becomes less innovative
•
•
•
•
Do we extend the parent brand ?
• Do consumers have some positive associations
about the parent brand in memory ?
• Will these positive associations be evoked by the
brand extension ?
• Will negative associations be transferred from the
parent brand ?
• Will negative associations be created by the brand
extension ?
When to Extend ?
Steps in successful brand
extension
• 1. Define consumer knowledge about the brand (brand
schema)
• 2. Identify possible brand extensions based on parent
brand associations and overall ‘fit’ of extension to parent
brand
• 3. Evaluate the potential of possible brand extensions:
 Salience of parent brand associations
 Favourability of inferred extension associations
 Uniqueness of inferred extension associations
Steps in successful brand
extension
• 4. Evaluate possible brand extension feedback:
 How compelling is the extension ?
 How relevant is the extension ?
 How consistent is the extension ?
 How strong is the extension ?
• 5. Consider possible competitive advantages as
perceived by consumers
• 6. Design marketing campaign to launch brand
extension
• 7. Evaluate brand extension success and effects on
parent brand equity
Possible Extensions for the Nivea Brand
BRAND DEFINITIONS
Nivea
Cream
RELATED CATEGORIES
moisturizer
Soap - face cream - skin cream
lotion
sunburn - after-shave - baby
medicinal
antiseptic - first-aid - hemorrhoid cream
purity
cotton - gauze - sterile pads
body care
emery boards - muscle toner - cotton swabs
pump bottle
liquid hair gel – hair detangler glass cleaner
fragrance
perfume - room deodorizer - deodorant
Extensions gone wrong
• New Coke
• Frito-Lay Lemonade
• Harley Davidson
Perfume
Top Brand Extensions
• Diet Coke
• Dove Shampoo
• Sony Digital Cameras