Product Mix Elements and Examples |

Product Mix Elements and Examples |

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 tend to use together or think of as similar products or services.

The product mix is a subset of the marketing mix and is an important part of the business model of a company.

What is Product Mix?

Product mix or product assortment refers to the total number of product lines that a company offers to its customers.

The product lines may range from one to many and the company may have many products under the same product line as well.

All of these product lines when grouped together form the product mix of the company.

Dimensions of a Product Mix

#1 Width

Width, also known as breadth, refers to the number of product lines offered by a company.

For example, Kellogg’s product lines consist of: (1) Ready-to-eat cereal, (2) Pastries and breakfast snacks, (3) Crackers and cookies, and (4) Frozen/Organic/Natural goods.

#2 Length

Length refers to the total number of products in a firm’s product mix. For example, consider a car company with two car product lines (3-series and 5-series).

Within each product line series are three types of cars. In this example, the product length of the company would be six.


#3 Depth

Depth refers to the number of variations within a product line. For example, continuing with the car company example above, a 3-series product line may offer several variations such as coupe, sedan, truck, and convertible. In such a case, the depth of the 3-series product line would be four.


#4 Consistency

Consistency refers to how closely related product lines are to each other. It is in reference to their use, production, and distribution channels.

The consistency of a product mix is advantageous for firms attempting to position themselves as a niche producer or distributor.

In addition, consistency aids with ensuring a firm’s brand image is synonymous with the product or service itself.

Key Product Mix Strategies

There are four key product mix strategies:

  1. Expansion: A company increases the number of product lines or depth (i.e., product variations) within lines.
  2. Contraction: A company narrows its product mix to eliminate lower-performing products or lines or to simplify remaining products or lines.
  3. Change an Existing Product: A company improves a current product rather than creating a completely new product.
  4. Product Differentiation: Without modifying the product in any way, a company positions it as a superior choice to a competitive product.

Additional product mix strategies include:

  • Deepening Depth: A company keeps existing lines but expands them.
  • Developing New Uses for Existing Products: A company finds and communicates new uses for current products without disturbing lines or products.
  • Trading Up: A company adds a higher-cost product to an existing line to improve brand image and increase demand for its lower-cost products.
  • Trading Down: A company adds a lower-cost product to an existing line of higher-cost products.

Example of a Product Mix

A popular and classic example of Product Mix is the brand Coca-Cola. For simplicity, let us assume that Coca-Cola oversees only two product lines that are soft drinks and juice (Minute Maid).

The Products that are classified as soft drinks are Coca-Cola, Fanta, Sprite, Diet Coke, Coke Zero, and the products that are classified as Minute Maid juice are Guava, Orange, Mango, and Mixed Fruit.

The product mix or the consistency of Coca-Cola would be high, as all the products within the product line fall under this beverage.

In addition, these production and distribution channels remain similar for each of these products. The product mix of Coca-Cola in the example is illustrated as follows:

Importance of a Product Mix

The product mix of a firm is important to understand as it has a profound impact on the firm’s brand image. The following are the important points for the firm to expand its product mix:

  • Expanding the product mix width can provide the company with the ability to satisfy the needs or demands of the different consumers and thus, diversify risk.

  • Expanding the product mix depth can help the company to cater to the current customers in a better and fulfilling way.

Factors affecting Product Mix

The product mix can be expanded, contracted, or modified depending on the following factors:

  1. Profitability-

Every company has an aim of maximizing its profits and for this, they try to make certain changes in the product mix such that it has a positive impact on the company’s profitability.

The company prefers introducing more product lines or product items to its existing product lines to improve profitability. In the meantime, the product mix is constantly adjusted to realize more profits.

  1. Objectives and Policy of the Company:

The company formaulates its product mix to attain the objectives it has set. Therefore, the addition, subtraction, or replacement of the product lines or the product items are based on the company’s target.

Hence, the product mix is prepared and modified according to a company’s policy.

  1. Production Capacity-

The decisions regarding the marketing mix, depend on the capacity of the plant or production of the company to a large extent.

The company designs its product mix in a way that hails optimum production capacity.

  1. Demand-

Mostly the Product mix decisions are taken concerning demand. A Marketer should study consumer behavior to find the popularity of their products.

The Change in the preferences of the consumers’ especially for fashion, interests, habits, etc., must be reflected in the product mix of the company.

The company, naturally, prioritizes the products which have more demand. In case of falling demand, a company must drop poor products gradually.

Thus, the product mix is adjusted to meet consumer needs and wants over time.

  1. Production Costs-

The product mix is widened or narrowed depending upon the production costs of the respective items.

The company will prefer those products, which can be produced within the budgeted limit.

At times, the manufacturing costs for existing products rise, then the company decides to drop such products to reduce their production costs.

It also tries to balance selling price, profit margin, and production costs.

  1. Government Rules and Restrictions-

Companies generally produce products that are not restricted or banned by governments. 

At times, a company has to stop certain products or varieties when they are declared illegal.

In the same way, social and religious protests also play a vital role in this regard. The size and composition of the product mix is directly affected by the contemporary legal framework.

  1. Demand Fluctuation-

Apart from the behavior of the consumer, demand also fluctuates due to other reasons as well.

Demand is affected more due to seasonal effects, non-availability of substitutes, increase in population, war, situations of drought, flood, or any other reason.

To meet the changing demand for certain products, the company has to adjust its product mix.

  1. Competition-

It is one of the major factors affecting the product mix. All the companies try to formulate their product mix in a way that the competition can be strongly responded to.

The product mix strategy adopted by the close competitors has a direct significant impact on the company’s product mix.

  1. Impact of Other Elements of Marketing Mix-

Other elements of the marketing mix such as price, promotion, and distribution are also equally important in designing the product mix.

The company tries to maintain consistency among these all elements to carry out marketing activities effectively and efficiently.

  1. Overall Business Condition or Condition of Economy-

Economic conditions domestically as well as globally are also considered. Due to the process of liberalization and globalization, no business can dare to underestimate the macro picture of the world economy.

Therefore, a company must keep in mind the condition of the domestic economy concerning the world economy and is more relevant for a company that is involved in international trade.

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