Product Mix

• Author: Michael Milbier
• Pages: 609-612

Page 609

The product mix of a company, which is generally defined as the total composite of products offered by a particular organization, consists of both product lines and individual products. A product line is a group of products within the product mix that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. A product is a distinct unit within the product line that is distinguishable by size, price, appearance, or some other attribute. For example, all the courses a university offers constitute its product mix; courses in the marketing department constitute a product line; and the basic marketing course is a product item. Product decisions at these three levels are generally of two types: those that involve width (variety) and depth (assortment) of the product line and those that involve changes in the product mix occur over time.

The depth (assortment) of the product mix refers to the number of product items offered within each line; the width (variety) refers to the number of product lines a company carries. For example, Table 1 illustrates the hypothetical product mix of a major state university.

The product lines are defined in terms of academic departments. The depth of each line is shown by the number of different product items—course offerings—offered within each product line. (The examples represent only a partial listing of what a real university would offer.) The state university has made the strategic decision to offer a diverse market mix. Because the university has numerous academic departments, it can appeal to a large cross-section of potential students. This university has decided to offer a wide product line (academic departments), but the depth of each department (course offerings) is only average.

In order to see the difference in product mix, product line, and products, consider a smaller college that focuses on the sciences represented in Table 2. This college has decided to concentrate its resources in a few departments (again, this is only a partial listing); that is, it has chosen a concentrated market strategy (focus on limited markets). This college offers narrow product line (academic departments) with a large product depth (extensive course offerings within each department). This product mix would most likely appeal to a much narrower group of potential students—those students who are interested in pursuing intensive studies in math and science.

PRODUCT-MIX MANAGEMENT AND RESPONSIBILITIES

It is extremely important for any organization to have a well-managed product mix. Most organizations break down managing the product mix, product line, and actual product into three different levels.

Table 1

Hypothetical state university product mix

Hypothetical state university product mix
WIDE WIDTH, AVERAGE DEPTH
Political Science	Education	Mathematics	Nursing	Engineering	English
Political Theory	Elementary Teaching	Calculus I	Biology	Physics	English Literature
American Government	Secondary Teaching	Calculus II	Chemistry	Advanced Math	European Writers
International Relations	Teaching Internship	Trigonometry	Organic Chemistry	Electrical Concepts	Hemingway Seminar
State Government	Post Secondary Teaching	Math Theory	Statistics	Logic Design	Creative Writing

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Table 2

Hypothetical small college product mix

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