PRODUCT SYSTEMS & MIXES
A Product system is a group of diverse but related items that function in a compatible manner. For example, Palm—One handled and smart phone product lines come with attachable headsets, cameras, keyboards, presentation projectors, e-books, MP3 players, and voice recorders. A product mix also called a product assortment is the set of all products and items a particular seller offers for sale. A product mix consists of various product lines. In General Electricâ€™s Consumer Appliance Division, there are product-line managers for refrigerators, stoves, and washing machines. NECâ€™s (Japan) product mix consists of communication products and computer products. Michelin has three product lines: tires, maps, and restaurant-rating services.
At Northwestern University, there are separate academic deans for the medical school, law school, business schools, engineering school, music school, speech school, journalism school, and liberal arts school.
A companyâ€™s product mix has a certain width, length, depth, and consistency. These concepts are illustrated for selected Procter& Gamble consumer products.
The width of a product mix refers to how many different product lines the company carries.
The depth of a product mix refers to the total number of items in the mix (it is 20). We can also talk about the average length of a line. This is obtained by dividing the total length (here 20) by the number of lines (here 5), or an average product length of 4.
The width of a product mix refers to how many variants are offered of each product in the line. If Tide comes in two scents (Mountain spring and Regular), two formulations (liquid and powder), and two or without bleach), Tide has a depth of eight as there are eight distinct variants. The average depth of P&Gâ€™s product mix can be calculated by averaging the number of variants within the brand groups.
The consistency of the product mix refers how closely to relate the various product lines are in end use, production requirements, distribution channels, or some other way. P&G product lines are consistent insofar as they are consumer goods that go through the same distribution channels. The lines are less consistent insofar as they perform different functions for the buyers.
These four product â€“ mix dimensions permit the company to expand its business in four ways. It can add new product lines, thus widening its product mix. It can lengthen each product line. It can add more product variants to each product and deepen its product mix. Finally, a company can pursue more product-line consistency. To make these products and brand decisions, it is useful to conduct product-line analysis.