Product mix is a technical term used to measure the number of product lines a business is involved in. It’s vital for building your image and figuring out appropriate branding.
As an entrepreneur, you need to understand every aspect of your business. You also need to have as much data as possible to figure out where you should invest your design resources.
Understanding the product mix definition and how it can help your business will ultimately help you to build a bigger, more profitable business. In this article, we’ll examine the product assortment concept and how you can implement it within your business.
What is a Product Mix?
Conducting a product mix analysis means figuring out how many product lines a company offers, and then comparing the four different dimensions, including length, width, depth, and consistency.
You’ll gain new insights into your business, and the results will inspire different brand-building strategies.
It should be mentioned that there is a debate over product line vs. product mix. The fact is these are not the same. A product line is part of your overall product mix.
The Four Dimensions
Understanding concepts like product depth, product width, and how they fit into your overall product assortment can drive further business and enable you to maximize the value gained from each customer.
We’re going to take a look at the four different dimensions to understand what they are.
1. Product Width
Product line width refers to the number of product lines you have within your business. The larger the business, typically, the larger the product width.
Lower product widths mean a more specialized business, whereas higher product widths mean more potential customers.
For example, if a company manufactures only screws, they have a width of one. If they expand to nails, this increases the width to two.
2. Product Length
Product length refers to the number of products within each product line. It’s simpler than it sounds.
If a store has an aisle of 30 different brands of sodas, the soda will account for one point in width and 30 in length because they have 30 different sodas available.
3. Product Depth
The depth of the product line is another dimension within your product mix analysis. Depth refers to the number of variations of a specific product. This can refer to any distinguishing characteristic, such as size and flavor.
For example, if a store sells Fanta and they have three different flavors and an additional three different sizes of each flavor, they will have a product depth of 12.
Consistency refers to the relationship between different product lines. For example, if the screw manufacturer from above has various lines of screws, they have a narrow consistency because, ultimately, all they sell are screws.
A company that only sells toothpaste and soda doesn’t have a consistent relationship because they sell multiple unrelated product lines.
Example of a Product Mix
Let’s take a look at an example of a product mix by using Apple.
Apple has four major sub-lines within its overall product line. These are smartphones, computers, tablets, and music devices.
Obviously, their smartphone line includes several different smartphone models. On top of that, they have an ample amount of depth because you can select between the same model in an array of different colors.
They also have a high level of consistency because their iTunes software enables you to connect all your devices via the cloud.
Apple has largely maintained a narrow width throughout most of its history but has continually expanded its length and depth, all while maintaining a high consistency rating. This aids in their branding and encourages loyalty among customers.
Product Mix Strategies
There are a variety of different strategies you can employ within your business to accomplish certain goals. Take note; there’s no single way to achieve success when managing your product mix. You have to do what’s right for your business.
Let’s take a look at some examples of product mix strategies.
Expansion means increasing the number of overall product lines or enhancing the depth. This can help companies access brand-new audiences.
A company eliminates poor-performing product lines to simplify its overall product assortment. This is helpful for laser-focused targeting of different markets.
Spending time and money improving a current product can elevate your market position and improve customer perception without creating entirely new products.
This helps overcome competitors.
Trading Up and Trading Down
Trading up means adding a premium-cost product to an existing line to alter a brand image. It can also increase demand for a company’s cheaper products. Trading down, likewise, has the opposite effect.
There are plenty of alternative strategies business owners may want to employ after conducting a product mix analysis.
These can include:
- Expanding depth within a product line.
- Coming up with new uses for existing products.
- Product differentiation. It’s the same product but marketed as superior to alternatives.
Focusing on product mix can pay dividends for your business. This process is made easy by downloading the TradeBeyond app. We help you connect with suppliers, carry out range sourcing, and source retail buyers.
Contact us to learn more about how the TradeBeyond app can help you execute your product assortment strategies and overall retail merchandising process.