The product hierarchy
Security
Item
Product type
Product line
Product classProduct
family
Need
family
Prudential renewable term
life insurance
Term life insurance
Insurance
Financial instruments
Savings, Income
More terms…
• A product system is a group of diverse but related items that function in a compatible manner.
• A product mix (also called a product assortment) is the set of all products and items a particular seller offers for sale.
Characteristics of product mix
• Width = number of different product lines
• Length=total number of items in the mix
• Depth =number of variants of each product in a line
• Consistency = relation of product lines w.r.t. end use, production requirements, distribution channels or some other way
Illustration of the characteristics
Consistency (Personal Care)
Total length = 8+2+5+2+3 = 20No. of line = 5Avg line line = 20/5 = 4Depth of product mix = sum of variants in each product = 8 if Tide came in two scents (Mountain Spring and Regular),two formulations (liquid and powder),and two additives (with or without bleach
Develop basic modules/platforms that can be added to the current variant
with lower production costs and
still meeting the customer expectations
Step 1
Step 2
• know the sales/profit of each product in the product line
Might be discontinu
ed
Product 1 and 2 are to
be retained
or improve
d
Use of Product line analysis
• Product line analysis provides information for two key decision areas-– product line length and – product mix pricing
Now on, the focus is on the product line length
Product line length
• Companies objectives affect the product line length
– Companies seeking high market share and market growth will gene rally carry longer product lines.
– Companies that emphasize high profitability will carry shorter ones consist of carefully chosen items.
1. Line stretching
Why/When
WhatDivisions Way
Line stretching
down market stretch
middle market
company introducing a lower-priced
linestrong growth opportunities
tie-up with low-market competitors
middle market
stagnated or declining
Up market stretch
two way stretch Eg:
titan
1. Line stretching (contd.,)
Why/When
WhatDivisions Way
Line stretching
down market stretch
Up market stretch
middle market
company introducing a higher-
priced line
strong growth
opportunitiesmiddle
market stagnated
or declining
Increasing market share
two way stretch Eg:
titan
How to name the new product??
Example
Way to name
naming
parent brand name
Titan
sub-brand name
Titan raga
different name Sonata
2. Line filling
Why/WhenWhatWay
Line filling
adding more items within
present range
items missing from
the line
utilizing excess
capacity,plugging
holes to keep out
competitors
CreditsBackground
www.flickr.com
Extracted / Based on Chapter 12 of Marketing Management by Kotler Keller Koshy Jha 14th edition
Disclaimer"Created by Vishnupriya Aryabhumi, IITMadras, during an internship by
Prof. Sameer Mathur, IIMLucknow.www.IIMInternship.com"