Managing product mix involves strategically organizing and refining a company's product offerings to maximize growth, market share, and revenue by focusing on the most promising products and product lines.
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managing product mix
hi I'm Bill Carmody and we're going to
talk about managing product mix
so what is a product mix strategy
a successful product mixed strategy
enables a company to focus efforts and
resources on the products and product
Lines within its offering that have the
greatest potential for growth market
share and Revenue
so let's break that down a little bit
further a product mix strategy has four
dimensions number one is the width
that's the total number of product lines
that a company offers
the length which the total number of
products in a company's product mix
the depth the total number of product
variations in a product line
and consistency indicating how product
lines relate to one another
product mixes vary from company to
company some have multiple product lines
with lots of products in each line but
others have a much more limited approach
let's visualize this
think about this if you're the company
on the far left hand side you've got
product line number one and you can see
that it's got three products under that
first product line so you'd say that the
product line depth is equal to three
because you have three products under a
single product line
then if you look across the entire
organization there are actual three
different product lines so you'd say the
product mix with is also three because
there's three product lines but then
look at product line number three you
have a sub product line one and two with
different products underneath it so
you'd have product line number three has
a length of two this is just the way you
organize the information and then the
that you'd want to look at is across all
the product lines what is the level of consistency
consistency
so does it seem like all these products
are complementary to each other are they
completely separated and working for
very different needs of very different
customers that will actually help you
with the dimensionalizing of the product
mix as well
core product mixed strategies include
expansion where a company increases the
number of product lines or depth such as
product variations within a line you see
this all the time with soda companies
when they come up with new flavors or
line extensions same thing in the cereal
aisle like lots of different places
where people have a successful product
and then they create these different
expansions of that particular product line
line
contraction is the opposite when a
company Narrows its product mix to
eliminate low performing product lines
or products to simplify the remaining
products or product lines in existence
so that might be when someone over
expands and they realize oh God all
these products are not working as well
as I thought they would and so they come
back to a contraction strategy and they
focus on only the product lines and the
specific products that are hugely
successful within the organization
you can also change an existing product
a company improves a current product
rather than creating a completely new
product so for example you might find
that a particular product isn't doing so
well and so rather than actually
creating a new product line or a new
product extension they just say hey
let's reformulate the product let's make
it taste better let's make it more
appealing to the customers maybe we're
not satisfying the original need when
the product was launched or the needs of
our customers have changed so you can
change the existing product and that
also helps reinvigorate that product
into the market
and then you also have product
differentiation without modifying the
product in any way a company simply
positions it as a superior choice to a
competitive product that is probably one
of the more interesting ones from a
marketing perspective because if you
think about it you think about soap at
The Core Essence most soaps are nearly
identical they're not all exactly the
same but they're pretty damn similar and
the thing about marketing is is how you
actually go out and talk about your
particular soap product would help make
the distinctions that the person has in
their mind why would I buy this product
over that product and it could be that
we are the low price leader so ours the
it has the same ingredients you want for
a lower price point another one is
quality actually the few things that are
different about our product are worth
paying the extra money for or it could
purely be that they represent the the
brands that you actually aspire to be
part of so as a consumer you're saying I
like these particular Brands because
they speak to me uh it gives me also
that those particular brands are doing
great things in the world so maybe
they're costing a little bit more but
they're also creating more
sustainability or they use better
recycled products right so there's a lot
of different ways which you can actually
play with this product mix strategy to
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