Product Mix
The product mix, also known as product assortment, refers to the total number of product lines that a company offers to its customers. It encompasses the variety of product lines that a company has under its brand. The product mix has four dimensions: width, length, depth, and consistency.
- Width: The width of a product mix refers to the number of different product lines the company carries. For example, if a company sells soft drinks, snacks, and dairy products, the width of its product mix would be three.
- Length: The length of a product mix refers to the total number of products or items that the company carries within its product lines. For example, if a company sells three different soft drinks and five different snacks, the length of its product mix would be eight.
- Depth: The depth of a product mix pertains to the number of variations of each product in the product line. This could include different sizes, flavors, colors, or other distinguishing characteristics. For instance, if a soft drink comes in three different sizes and two different flavors, that product would contribute six to the product mix depth.
- Consistency: The consistency of the product mix refers to how closely related the product lines are in terms of their use, production requirements, distribution channels, or any other aspect. For example, a company that produces both dairy products and soft drinks would have a low consistency in its product mix, as these product lines are produced and used quite differently.
A company’s product mix can greatly influence its brand identity, market positioning, and strategic direction. By analyzing and adjusting its product mix, a company can better meet customer needs, take advantage of market opportunities, and achieve its business goals.
Example of Product Mix
Let’s take the example of the consumer electronics company Apple Inc.
- Width: Apple has a broad product mix width with various product lines including Mac (computers), iPhone (smartphones), iPad (tablets), Apple Watch (smart wearables), Apple TV (digital media players), and services like iCloud, Apple Music, Apple Pay, etc. The width of Apple’s product mix is thus quite extensive.
- Length: The length of the product mix would include all products across all lines. For example, under the iPhone line, as of my knowledge cutoff in 2021, there were models like iPhone 12 Mini, iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max. Similar product counts can be done across all product lines, and their total will give the length of the product mix.
- Depth: This refers to the variations of each product. For instance, looking at just the iPhone 12, it comes in four colors (Black, White, Red, Green, Blue) and three storage capacities (64GB, 128GB, 256GB). Hence, the depth for just iPhone 12 is 12 (4 colors x 3 storage options).
- Consistency: Apple’s product lines are fairly consistent. They’re all in the consumer electronics and services category, have similar aesthetic design principles, integrate well with one another, are sold through similar distribution channels, and are targeted towards similar customer segments.
Remember, the composition of a company’s product mix can change over time as it adds new product lines, expands or reduces existing ones, or enters new markets. Companies strategically adjust their product mix in response to market trends, competitive pressure, and technological advances.
