If you're in the business of selling – and most companies are, in one way or another – it's important to have the products your customers want, and to have enough of them. For managers, that comes down to making decisions about which product lines to carry, and how to put them together to make a winning product mix. It's like building a successful sports team: You need the right players, but they also have to work well together.
Product Line Definition
A product line is a group of products that are closely related and are promoted together. For example, when a company creates a group of products that deal with hygiene, such as shaving cream, soap and shampoo, this is known as a product line. The line of products typically shares the same logo, brand and color scheme. This way, customers can easily identify other products within the same group. The products are not exactly the same, but they typically share some of the same characteristics.
Product Mix Definition
The product mix of a company involves all of the products that a company has for sale. The product mix could include several lines of products or individual products that do not fall into a line. For example, if a company owns a line of hygiene products and also owns a line of house cleaning products, all of those products together would constitute the product mix for the company. Each line would combine with the other to come up with the total mix.
Diversifying Your Product Mix
Many companies focus on product mix because it helps them diversify their offerings. Instead of focusing in on a particular type of product, a company may come up with a wide range of products to offer. This way, even if one group of products does not sell well, the other products can pick up the slack. These decisions are always a balancing act, because every product you add represents an investment of resources In some cases, companies can get a product mix that is too wide and it ends up eating up resources that the company could have better used in other ways.
Managing Length and Width of Product
Those decisions are often expressed as the length of your product line, and the width or breadth of your overall product mix. The length of your product line is measured by how many products it contains, and that will vary with the product. If you manufacture lawn tractors, three base models and their accessories might represent a good line. If you're in the lipstick or nail polish business, you might need dozens in order to be competitive.
The breadth of your product mix is measured by how many lines you carry, and how diversified they are. A lawn tractor manufacturer might broaden its mix by also building tillers, lawnmowers, snowblowers and light construction equipment, for example. Retailers determine the breadth of their product mix by their target market. A specialty store focused on athletes might carry a stellar selection of athletic shoes, bolstered by plenty of fitness-oriented accessories. The product mix in a hardware or department store will be much broader, reflecting its catchall marketing strategy.
Product Mix in Marketing Management
One of the potential applications of using a product line is to help with pricing. When a company comes out with a line of products that are very similar to one other, it can use this to price the products effectively. For example, many companies use a "good, better, best" method of pricing products. The entry-level product has the lowest price, followed by the better product and then the best product. This can be a way to cater to customers in every pricing group.
Alternatively, rather than focusing directly on price, the marketing mix might include brands with carefully curated "lifestyle" messaging that resonates with buyers of different budgets.