Let’s say you’re trying to start an ecommerce jewelry brand to capitalize on the success you’ve experienced selling handmade earrings at art fairs across the country. You already have a growing legion of followers on social media, where you’re known for your five main earring styles, each with different colorways and patterns. As you look to scale online, you begin building out a product line of handcrafted bracelets to cater to those who don’t wear earrings.
This is a perfect example of determining your product mix. You too can employ tried-and-true strategies like product line expansion to help establish a successful brand image and strengthen your overall business strategy.
What is a product mix?
Product mix refers to the comprehensive slate of products and services your company offers to its consumers. It’s the strategic combination of goods you’ve made available across all your product lines and brands in response to factors like market demand and competition. You might also hear product mix referred to as “product assortment” or “product portfolio,” but whichever term you use, it’s all about having a complementary assortment of products and/or services.
Why is product mix important?
Your product mix plays an integral role in establishing your brand’s identity and carving out a competitive edge. Having a diverse product mix of offerings that reflect your brand image can increase customer satisfaction because consumers have the right variety of options to choose from. Designing your product mix is also an opportunity to set yourself apart from your competitors by offering a suite that no one else can replicate. A successful, curated product mix takes you from a company known for one great product to a brand known for its approach.
To help you decide on the right assortment of products, conduct market research and a regular internal product mix analysis that examines factors like your sales data to help you determine which products or product lines to keep, change, or remove.
Product mix vs. product line: What’s the difference?
A product mix includes every product a company offers, whereas product lines refer to specific categories or brands the company sells. In other words, you will have only a singular product mix, but it may encompass multiple product lines with myriad products in each.
For example, consider a typical big-box home goods retailer. The company has multiple product lines, each of which caters to different interior design and home goods needs, such as furniture, storage and organization, lighting, décor, home electronics, and kitchenware. The collective items across these multiple product lines constitute the product mix.
Dimensions of a product mix
- Width
- Length
- Depth
- Consistency
Just as a physical item has its own dimensions, so too does your product mix. Dimensions of a product mix can have numerical values and include:
Width
Width, or breadth, encompasses the total number of product lines within your company. Nestlé, for example, has a product width that includes beverages, breakfast cereals, chocolates and confectionery, milk products, foods, and nutrition, for a width of seven.
Length
Length refers to the total number of products in your company’s product mix. In the case of Nestlé, this includes the combined number of items (around 10,000 total) it sells across each of its seven product lines.
Depth
Depth reflects variations in the types of products within one of your individual product lines. For example, within Nestlé’s beverage product line, the company sells dairy drinks, coffee, and bottled water—a depth of three.
Consistency
Consistency refers to how your product lines relate to each other in terms of their end use, production methods, and distribution channels. If the goods are similar or closely related, then you have a consistent product mix. This can help keep your production and distribution processes efficient and help you establish a strategic market position against your competitors. An inconsistent market mix can help you diversify—but at the risk of brand dilution.
Product mix strategies
When it comes to building an effective product mix strategy, there are several approaches you can take. Here are six key product mix strategies to consider:
Expansion
Expansion involves adding new product lines or product variations to increase your existing line’s depth and create a broader product mix that can help with market penetration. You might execute an expansion to keep up with market trends or to target a specific audience.
For example, a company that sells reusable water bottles might expand its existing product line by introducing new sizes or styles of water bottles. Or it might expand its product mix by launching coffee tumblers designed to insulate hot beverages.
Contraction
Sometimes less is more. Just as your company might expand its product lines or depth, you might decide to remove products in response to market trends, slumping sales, poor financial performance, or customer feedback. Culling unsuccessful products can help simplify your product line, increase sales of more successful products, and better align your brand with the needs of your target market. Establishing effective inventory management and staying ahead of market shifts can help inform a smart contraction strategy.
Modernization
Modernization refers to updating and innovating your existing products to include new features, like upgraded technology, enhanced style, and improved materials. You might do this in response to emerging trends, shifting market dynamics, customer feedback, and/or customer preferences. For example, you might add generative AI tools to your premium customer relationship management (CRM) software, giving subscribers the ability to automate personalized emails en masse.
Filling
Filling involves adding new products or offerings to account for gaps in your product line. For example, a hair care brand may add a leave-in conditioner and hair mask to complement its existing shampoo and conditioner products.
Trading up
Trading up is one of two pricing strategies that involves adding more expensive items to a product line to improve the perception of your brand. Adding more costly products may shift your brand to a higher-end identity, while at the same time increasing demand for your company’s cheaper offerings.
Trading down
The opposite of trading up, the trading down pricing strategy involves adding a product line with lower price points to sell alongside your more expensive items. Including more accessible products with competitive pricing can help widen your audience and reach new customer segments, ultimately translating to more sales. For example, your enterprise CRM company might offer a pared-down subscription for small businesses. It could include just the essentials for a lower monthly price than the premium subscription.
Product mix FAQ
What does a product mix refer to?
A product mix encompasses all products and services a company provides, including all of its product lines and brands. Companies can determine their product mixes to establish their image and reach target audiences.
What is a product mix example?
The technology company Apple has a product mix that includes its iPhone, iPad, MacBook, Airpods, Apple Watch, Apple TV, Vision Pro, HomePod, and branded accessory products. Each separate form of technology also serves as a product line, with Apple offering multiple versions of iPhones, iPads, MacBooks, etc.
What are the four dimensions of a product mix?
The four dimensions of a product mix are width, length, depth, and consistency. Width refers to the total number of product lines within a company. Length is the total number of products in a company’s product mix, including all items across product lines. Depth reflects variations in the types of products within each product line. Consistency is how the product lines relate to each other in terms of their end use, production processes, and distribution methods.
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