Product mix decisions

What is a product mix?

A product mix is also referred to as a product assortment. It is the full range of products offered by a firm. As discussed in another article on this website, firms will have sets of products in what is known as a product line.

Large firms would generally offer several product lines to the marketplace – such as Coca-Cola with soft drinks, juices, water, sport drinks, and so on. Under each product line they offer a variety of different products.

Therefore, all the products offered under all the products lines by the firm is their overall product mix.

Product mix decisions

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.

In the overall product mix decision, a firm needs to consider product line:

  • breadth,
  • depth,
  • length and
  • consistency.

Product line breadth

Product line breadth refers to how many (or how broad) is the range of products offered by the firm. For example a manufacturer of kids clothing, could produce shirts, pants, and skirts only – having quite a limited breadth of clothing products.

Compare this to another manufacturer who may have the same product line as the first manufacturer, but they also offer hats, shoes, sunglasses, other accessories, and even some toys – they have a broader product line offering.

Product depth

Product depth refers to the number of products they offer which are variations of the product. For example, a manufacturer of kid’s clothing may design a shirt for sale. This one shirt will then be produced in different colors and sizes. The number of variations of the same shirt is considered to be the product depth.

product mixProduct line length

Product line length refers to how many different types of products are included in the product line. For example, using the same example of a manufacturer of kid’s clothing, they might decide to offer 20 different designs of shirts for boys. This is their product line length for shirts.

Product line consistency

Product line consistency refers to how similar – particularly in relation to the overall positioning – the set of products under the product line are. Continuing with the kids clothing manufacturing example, a manufacturer who mainly produces cute looking shirts for girls would be considered to have a high level of product consistency.

However another manufacturer may have a couple of cute shirts, then have some funny shirts, and even have some quite bizarre shirts on offer as well – in this case, there appears to be little product consistency, making it harder to communicate a clear positioning.

Strategic decision and product mix decision

The overall product mix offering tends to be quite a strategic one as it pushes or restricts the brand/firm into competing in different parts of the marketplace. A fairly limited range of a product mix means that the brand is often more of a niche player.

Firms of a very large product mix tend to compete in most areas of the marketplace and compete against a much broader range of competitors as a result.

Related Topics

Product mix example