Product Mix
Project #3 :: She Sells Cell Phones at the Cell Store
Principles of Marketing
Mrs. Schroeder
The Multi-Product Firm
–Marketing is most often approached as if the company has a single product
–In fact, most companies produce a large range of different products
–This is done for a number of reasons:
–To spread the risk and not be over-dependent on a single product
–To cope with the dynamic market place
–To suit different types of customers
The Product Mix
–The total sum of all products offered by a company
–The set of all product lines and items that a particular seller offers for sale to buyers
–The composite group of products that a company makes available to market
–A product item is an individual product or brand
Nestle Breakfast Cereals
–Cheerios
–Triple Berry Cheerios
–Strawberry Cheerios
–Honey Nut Cheerios
–Shredded Wheat
–Triple Berry Shredded Wheat
–Honey Nut Shredded Wheat
–Clusters
–Shreddies
–Frosted Shreddies
–Golden Grahams
–Cinnamon Grahams
–Fitnesse
–Fitnesse and Fruit
–Nesquick Cereal
Nestle
–Nestle breakfast cereals are manufactured by Cereal Partners which is a joint venture of
Nestle and General Mills
–The list of cereal represents the product mix of Cereal Partners
–Within this mix we can group together
–Cheerios
–Shredded Wheat
–Shreddies
–And others as related products in a product line
Product Line
–A group of closely related product items
–They are related in terms of
–Function
–Benefit
–Production
–The way in which they are marketed
–A group of products (manufactured and distributed) which are similar in the way they are
produced or marketed
Ford Product Lines
–Cars
–Trucks
–Vans
–SUVs
–Tractors
–Buses
–Military
–Concept and movie cars
–But within each product line there are variants in terms of:
–Engine size
–Styling
–Number of doors
–Other features
Product Line Length
–Product line depth refers to the number of variants within the product line
–The depth of the Ford van line is the number of variants of the van that are offered
Product Line Strategies
–Product line extension
–Adding depth to an existing line by introducing new products in the same category
–Extension provides:
–The customer with more choices
–The organization with defense against attacks by rivals
–Product line modernization
–Re-launching of the product line to suit changes in taste
–Product line stretching
–Introducing new product into a product line; new variations within the line
–Product line pruning
–Reducing the depth of a product line by deleting less profitable offerings in a particular
product category (cutting out less profitable variations)
Width of the Product Mix
–Product line width is the number of distinct product lines offered by an organization
–Purina (a subsidiary of Nestle) produces pet food marketed under the following brands:
–Felix, Go Cat, Gourmet, Winalot, Pro Plan, Beta, Bakers
–If each brand is considered a product line, the number of variations of that product make
up the depth of the line
Boston Matrix
Boston Matrix
–High market growth – high market share
–Stare: cash neutral – INVEST
–High market growth – low market share
–Problem child: cash drains – GET RID OF
–Low market growth – high market share
–Cash cows: cash generating – INVEST
–Low market growth – low market share
–Dogs: cash drains – LIQUIDATE