In this article, you will learn about 1 an introduction in marketing and promotional mix, 2 the key components of the promotional mix, 3 how to establish an effective promotional mix, and 4 a short conclusion. Aug 30, 2019 product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing new variants of a brand to expand the business and to increase the profitability. Marketing mix decisions for new products philip kotler, 1964. A product line often evolves, as manufacturers want to take advantage of a brands value and the success of other products in the mix. Knowledge of consumers beliefs that can be related to the product to get the expected response. A product line refers to a unique product category or product brand a company offers. A key factor is defined as the factor in the activities of an undertaking which, at a particular point of time or over a period, will limit the volume of output. Introduction to promotional mix there are lots of things that must come together for a company to successfully promote its products or services. The product mix is the variety of products a company produces or sells to the marketplace. Product mix decision refers to the decisions regarding adding a new or eliminating any existing product from the product mix, adding a new product line, lengthening any existing line, or bringing new variants of a brand to expand the business and to increase the profitability.
Setting different promotional tools, each tool for specific target but all linked to acquire a common target. Decisions regarding the product, price, promotion and distribution channels are decisions on the elements of the marketing mix. Different conceptions of the marketing mix will yield different estimates of profit potential. It develops a marketing mix for each of the segments. This enables an analysis of the constituency of the product mix to be made. The marketing manager is considering the possibility of refining aa100 further into finer perfumes before selling them to the cosmetics companies. However, the product line is a subset of the product mix. Decision making choice of product product mix decisions cost.
Learn vocabulary, terms, and more with flashcards, games, and other study tools. Decisions on a productmix level product decisions at the productmix level tend to determine the width of a. Many companies start as a single product item or product line business. Product line and product mix have direct relationship. Product mix decisions arise as soon as an organization has several product lines. Pdf chapter 8 product, services, and branding strategies. Product line analysistaking decision regarding whether addingnew product line or not, lengthen the existing product line or not, analysis of product line is useful. Finally, at the end of the time horizon, the firm observes the demand and makes the production quantity and pricing decisions for end products. An introduction to an effective promotional mix cleverism.
This article expands activitybased costing abc to incorporate the cost of capital. In this episode, we will study, not an exception to that, but the special point of view that forces us to keep in mind that oftentimes in reality managers at companies and projects they have to make decisions based on specific constraints. Product mix and the acquisition of the assets needed for their production are interdependent decisions. In evaluating a new product idea, it can be misleading to consider only one conception of the products attributes and marketing program. Product attributes stage one of individual product decisions. The objective of this thesis is to demonstrate the use of the activitybased costing abc approach together with the theory of constraints toc philosophy in determining the optimal product mix and restrictive bottlenecks of a company. Product definition a productservice is the most important component of the marketing mix being the centre of focus as the offer to the market. A fairly limited range of a product mix means that the brand is often more of a niche player. After getting a taste of success and with an availability of more resources, companies decide to expand their product line andor introduce newer product lines in consonance with market opportunities or in response to competitors moves.
The overall product mix offering tends to be quite a strategic one as it pushes or restricts the brandfirm into competing in different parts of the marketplace. And another decision companies have to make with regard to the. Every company deals with limited capacity, so smart decisions about product mix can greatly increase your profit. Decisions on a product mix level product decisions at the product mix level tend to determine the width of a companys product mix. Simply, it shows the number of items in the product line. Product mix is defined as the set of all products and items that a particular seller offers for sale. Firms may be price setters for some of their products services and price takes for others. Width is one of the ways marketers describe the extent of a companys product mix. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Factors affecting pricing decisions business study notes. Chapter 7 decisions related to the marketing mix decisions. The astrocosmo problem considered earlier is an example. Here i am mentioning three most common definitions of product mix.
Marketing textbooks, when discussing the product mix, usually outline a series of decisions in regards to product attribute decisions. Number of different, so if the line is canned soups then you might have certain types of soups. The following are the major features of promotion decisions. The objective of this thesis is to demonstrate the use of the activitybased costing abc approach together with the theory of constraints toc philosophy in determining the optimal productmix and restrictive bottlenecks of a company. Product mix under capacity constraints activitybased. The product mix constitutes all individual product items and product lines the company markets.
A price taker firm facing a shortrun product mix decision 4. A new approach to the product mix decision find, read and cite all. Retailers carry a mixture of products to satisfy various customers. Urban il4assachusetts institute of technology the decision to add, or to reject, or to investigate more fully a new product proposal is one of the most important problems faced by businessmen. Product mix constitute width, length, depth and consistency. Optional product pricing involves setting prices for accessories or options sold with the main product. The range of products offered by a firm is a critical strategic decision that will determine how the firm and their brands compete in the marketplace and the overall positioning of the brand. At a later time and before the end of the time horizon, the firm makes a capacity commitment decision on the allocation of the flexible capacity to each product. So, in this discussion, we will take a look at the product mix under capacity constraints. Awareness of target consumer and their preference of media.
Some companies have thousands of different products in their mix. Although quality can be defined in many ways, we can define it as the characteristics of a product or service that determine its ability to satisfy the customer needs. The combined impact of product mix on capacity management decisions and operating per formance is examined using data from three textile manufacturing plants of a single. Marketing mngmt promotion decisions tutorialspoint. Product line depth refers to the number of versions offered of each product in the line. Ch8 managing products, product lines, brands, packaging. Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. Capacity and product mix in cost accounting dummies. The product mix, also called product portfolio, is the set of all product lines and items that a company offers for sale. Product mix decisions in marketing management tutorial. Product positioning is a strategic management decision that determines the place a product should occupy in a given market its market niche. In other words the value exchanged for use of the benefits of a certain product or service by the. Product mix width, length, depth, consistency with examples. The contribution of this thesis is a new product mix decision model that uses activitybased cost information.
Innovation is inherently risky, and firms may invest considerable time and money in. Each element is also referred as mix, for example, product mix, price mix, promotion mix, and place mix. The breadth of a product mix shows the different kinds of product lines that firm carries. Product mix strategies price lining x is a special pricing technique that sets a limited number of prices for specific groups or lines of merchandise. Product mix overview, dimensions and practical example. Combination of all the product lines constitute the product mix. Download as ppt, pdf, txt or read online from scribd. On account of this, kee 1995 began to integrate abc with toc in the productmix decision analysis. Sep 06, 2018 this is the basic explanation of how to analyse the product mix of any company. An activity based costing and theory of constraints model for productmix decisions by ayse pinar gurses abstract the objective of this thesis is to demonstrate the use of the activitybased costing abc approach together with the theory of constraints toc philosophy in determining the optimal productmix and restrictive bottlenecks of a. Any company that you take an example of, will have different product lines and within those product lines, there will be various products, the combination of which will give you the product mix of the company. Before proceeding towards the main topic product mix pricing strategies in marketing first you should be aware of this common marketing terms product mix or product portfolio.
In cost accounting, product mix refers to the mix of products you produce. The individual product decisions are completed by labelling and product support services. Of special attention will be the role of relevant and opportunity costs in valuation. The consistency of a product mix refers to how closely related are the companys product lines in terms of characteristics, production process, distribution channels to name just a few. A price setting firm facing a longrun pricing decision 3. Aug 04, 2015 to receive additional updates regarding our library please subscribe to our mailing list using the following link. The resulting model traces the cost of capital to products and thereby. Product mix and product line understanding product. Product mix, branding, packaging, labeling, warranties, customer service. The author shows how the best marketing mix can be found under the conditions of limited information.
Therefore, the quality is one of the most important individual product decisions. Pdf product strategies of companies in the fmcg industry. The marketing mix comprises of four decisions which should be considered before launching a product. Product mix and product line understanding product length. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management. Mba notes marketing management product mix decision what is product mix.
Product mix strategy and manufacturing flexibility. What is meant by product line, length, breadth, consistency and depth. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges. It can be argued that product decisions are probably the most crucial as the product is the very epitome of marketing planning. Unfortunately, new product development is an extremely challenging and complex process. Before going into the detail of factors affecting pricing decisions, lets discuss some of the basic concepts of pricing, which are also important to know. Leventis group with the franchise to bottle and sell products of the coca cola apr 08, 2015 marketing mix seminar and ppt with pdf report. Basic concept a product can be defined as a collection of physical, service and symbolic attributes which yield satisfaction or benefits to a user or buyer. Chapter8 managing product, product lines, brands, packaging 5 companys decision making on product relates to. Product mix decisions width, length, depth and consistency. Product mix or product assortment is a set of the total number of products lines that a seller offers in the market to its buyers. This is related to all the product mix and line decisions we have to take in a. It offers the ability to expand your customer base by offering more products in more niches. The marketing mix is a business instrument used in marketing and by marketers.
Product attribute decisions the marketing study guide. Highlights we consider growing mix complexity problem. Product mix, also known as product assortment, refers to the total number of product lines a company offers. Understanding the basics of a product mix will help you understand why it is so important to your organization. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important. One element of the product attributes is the quality of the product. Thus, product line width is a depiction of the number of product lines which a company has. The constituents of marketing mix are said as marketing mix elements. Product mix decision making pmdm a product mix is defined as the number of product lines that a company sells.
What is product mix width product mix refers to the full range of products a company makes. Product item a specific version of a product that can be designated as a distinct offering among an organizations products. However, these decisions are frequently evaluated independently of each other and with conceptually different decision models. Marketing mix of 4ps for competitive advantage meera singh1 1 computer department h. Individual product decisionprinciples of marketing read. For example, the new system will result in more accurate product costs which will influence pricing and product mix decisions. A product mix is a group of everything a company sells. A product is a combination of physical attributes say, size and shape.
Before turning to the product mix decisions, we first have to know what the product mix actually is. In the overall product mix decision, a firm needs to consider product line. The factors surrounding the decision can be mathematically considered by four. The money claimed against the offered product or service in the market is called price. The contribution of this thesis is a new productmix decision model that uses activitybased cost information. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management a product is any offering to the market for attention, acquisition, use or consumption that might satisfy a need. Usually product attributes extend to actual features, as well as uses and benefits. Product definition a product service is the most important component of the marketing mix being the centre of focus as the offer to the market. An activity based costing and theory of constraints model. A price setting firm facing a shortrun pricing decision 2.
Selling price positioning can minimize customization costs. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. Furthermore, abc has been criticized for its failure to incorporate constraints into productionmix decisions kee and schmidt, 2000. You just need to work out the most profitable product mix. The width of the product mix is equal to the number of product lines within a company. Product mix, also known as product assortment or product portfolio, refers to the complete set of products andor services offered by a firm. The length of the product mix shows the number of different products in a product line. Individual product decisions required can be sorted into five categories or stages. A product mix is an important consideration for any firm.
Attributes of a product are the various components that make up the product. Apr 08, 2020 a product mix is a group of everything a company sells. Pdf on aug 1, 1974, jerry wind and others published product portfolio. Developing a product or service involves defining the benefits that it will offer. For example, patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc. Increasing customization requires flexible investments. Product mix is an important consideration for businesses that have large product or. Oct 02, 2017 this is where the concept of product mix and product line decisions occur, this article clearly explains the differences between product mix and product line in a detailed manner along with examples. Decision making choice of product product mix decisions cost and management accounting business costing business management commerce accounting. We refer to investment choice, product mix strategy and sales price positioning. These benefits are communicated to and delivered by product attributes such as quality, features, style and design. These decisions and how they relate to each other are known as the marketing mix, often referred to as the 4ps of marketing price, product, place and. Since product strategies are an essential part of companies marketing.
1240 1608 423 583 1133 1480 59 959 693 116 1415 451 606 526 229 1534 1560 291 284 47 170 1514 29 136 1333 282 1487 1114 1362 36 218 1085 1491 1622 634 1492 1126 723 1245 206 1157 1199 930 528 516 1282