9-1

Product-Mix Strategies

Chapter 9Chapter 9Chapter 9Chapter 9

9-2

Chapter GoalsChapter GoalsChapter GoalsChapter Goals

• Difference between product mix and product line• Product-mix strategies - positioning, expansion,

alteration, contraction• Trading up and trading down• Managing products throughout a life cycle• Planned obsolescence• Style and fashion• Fashion-adoption process

9-3

Product Mix and Product LineProduct Mix and Product Line

PRODUCT MIXPRODUCT MIXThe set of all products offered The set of all products offered

for sale by a companyfor sale by a company

PRODUCT MIXPRODUCT MIXThe set of all products offered The set of all products offered

for sale by a companyfor sale by a company

PRODUCT LINEPRODUCT LINEA broad group of A broad group of

products for similar usesproducts for similar usesand with similar characteristicsand with similar characteristics

PRODUCT LINEPRODUCT LINEA broad group of A broad group of

products for similar usesproducts for similar usesand with similar characteristicsand with similar characteristics

9-4

BREADTH The number of product lines carried

Product MixProduct Mix

DEPTH

Varietyof

sizes, colors,

models within

a product

line

PRODUCT MIXPRODUCT MIXPRODUCT MIXPRODUCT MIX

9-5

Product Mix- Breadth and DepthProduct Mix- Breadth and Depth

9-6

Positioning the ProductPositioning the Product

COMPETITORCOMPETITORCOMPETITORCOMPETITOR

High price/high qualityor

low price

High price/high qualityor

low price

DifferentialadvantageDifferentialadvantage

Associated with attractive attribute

Associated with attractive attribute

PRODUCT CLASSPRODUCT CLASS OR ATTRIBUTEOR ATTRIBUTEPRODUCT CLASSPRODUCT CLASS OR ATTRIBUTEOR ATTRIBUTE

PRICE PRICE AND QUALITYAND QUALITY

PRICE PRICE AND QUALITYAND QUALITY

9-7

Product-Mix StrategiesProduct-Mix Strategies

Alteration of Alteration of existing productsexisting products

Alteration of Alteration of existing productsexisting products

ContractionContractionContractionContraction

Trading Up andTrading Up andTrading DownTrading Down

Trading Up andTrading Up andTrading DownTrading Down

ExpansionExpansionExpansionExpansion

9-8

Product Life CycleProduct Life Cycle

9-9

Product Life-Cycle StagesProduct Life-Cycle Stages

9-10

Length of Product Life-CycleLength of Product Life-Cycle

Product life-cycle variations

9-11

Life-Cycle ManagementLife-Cycle Management

Entry Strategies

Managingon

the Rise

Survivingthe

Decline

GrowthGrowthIntroductionIntroduction MaturityMaturity DeclineDecline

Managingduring

Maturity

9-12

Planned ObsolescencePlanned Obsolescence

TechnologicalObsolescenceTechnologicalObsolescence

StyleObsolescence

StyleObsolescence

9-13

Fashion Adoption ProcessFashion Adoption Process

9-14

Key Terms and ConceptsKey Terms and ConceptsKey Terms and ConceptsKey Terms and Concepts

• Product mix

• Breadth

• Depth

• Product line

• Product-mix expansion

• Line extension

• Mix extension

• Product alteration

• Product-mix contraction

• Trading-up

• Trading down

• Product life cycle

• Introduction stage

• Growth stage

• Maturity stage

• Decline stage

• Fad

• First-mover advantage

• Product abandonment

• Planned obsolescence

9-15

Key Terms and ConceptsKey Terms and ConceptsKey Terms and ConceptsKey Terms and Concepts

• Technological obsolescence

• Style obsolescence

• Style

• Fashion

• Fashion-adoption process

• Fashion cycle

• Trickle-down theory

• Trickle-across theory

• Trickle-up theory