Product/Service Management

Product Mix

Product Line

Product Width

Product Depth

Product MIX:All the different products that a company makes or sells.

KRAFT Company Example:

….Kraft

….Maxwell House

….Kool-Aid

….Oscar Mayer

….Post Cereal products

Product Line◦ Group of closely related

products manufactured &/or sold by a business

◦ Example:Kellogg’s makes all the cereals listed

All product lines are apart of the product mix

A product line can be determined by the following:◦ They function similarly

All of Chevrolets Cars are a Product Line

◦ They are sold to the same groups of people All of Staples Supplies sold to schools

◦ Are marketed the same way

◦ Are priced similarly

Product Item◦ A specific model,

brand, or size of a product within a product line.

Product Mix Example◦ All classes AK offers

Product Line◦ All marketing courses offered

Product Item◦ Marketing◦ Sports Marketing◦ International Marketing

Product Mix: ◦ The width and depth of a company’s product

offerings.

Width: number of different product lines a business manufactures or sells Small businesses have fewer product lines; less width

Depth: number of product items within a product line Company sells three different sizes & three different flavors

they would have a product depth of 9. Example: Chocolate = small, medium, large

Working in groups of 1-3; you will be assigned a Company

◦ Define Product Mix At least 10 brands they sell

◦ 3 Examples of Product Lines

◦ 5 Product Items Specific items sold by company

◦ General Motors◦ Mars◦ Nestle◦ Sony◦ Proctor & Gamble◦ Kraft◦ General Mills◦ Johnson & Johnson◦ Unilever◦ Kellogg’s◦ Coca-Cola◦ Pepsico◦ Dr. Pepper/Snapple

Nike owns◦ Nike Golf◦ Nike Pro◦ Nike+◦ Nike Skateboarding◦ Air Jordan◦ Converse◦ Hurley International

◦ NikeTown Retail Stores

4 Product Lines Examples◦ Converse◦ Basketball◦ Soccer◦ Clothing

Could’ve broken it down by:◦ Others Sports◦ Hurley, Golf, Jordan

Converse All Star Ox◦ $49.99

Nike Club Swoosh Full Zip Hoodie◦ $39.99

Nike Air Max 2013◦ $179.99

Types of Goods Sold1.Staple2.Convenience3.Shopping4.Specialty5.Fashion6.Seasonal7.Unsought8.Industrial

Product Life Cycle◦ Introduction◦ Growth◦ Maturity◦ Decline

Product Mix Product Depth Product Width Product Line Product Item

Trading Up Trading Down Alteration Expansion Contraction

Create 10 Flash cards based on the following concepts

1. Product Width: Contraction2. Product Width: Expansion3. Why would a company want to narrow its products?4. Product Depth: Shallow5. Product Depth: Expansion6. Product Item7. Trading Up8. Trading Down9. Alteration10.Product Positioning

Product Width is either narrow or broad

◦ Narrow Product mix occurs when a company offers a limited number of product lines Also known as Contracting

◦ Why would a company want to narrow its product mix? Easier on management Cost effective Simplicity Consistency

In 2009; General Motors (GM) filed for bankruptcy protection

They were told they needed to cut back◦ GMC◦ Cadillac ◦ Buick◦ Chevy ◦ Pontiac◦ Saturn◦ Saab◦ Hummer

Companies seek to expanding their product width by making it broader

Expanding allows you ◦ Reach more markets◦ Gain a competitive edge

Example of product width is Red Lobster◦ Specialize in seafood◦ Sell pasta, chicken, & steak to broaden product

mix

Product Depth expands when more product items are added to a product line

Why would you expand on a product line?◦ Wider Variety◦ Greater Quantity

◦ Dillards choosing to sell more colors, sizes, styles of Levi Jeans

A shallow product depth occurs when there are less products offered in a product line

Why would you contract your product depth?◦ Cost Effective

Example would be Red Lobster selling chicken on its menu

Usually only 2-4 menu options Not cost effective to offer a wider variety

Companies devise strategies for their products so that they are profitable

Existing product strategies◦ Alteration◦ Trading Up◦ Trading Down

Alteration occurs when an existing product is altered

Improve an established product with new design, new package, &/ or new uses

◦ Example: Jeep Company

Trading Up◦ Occurs when a company adds a higher-priced

product to a line

◦ Trying to attract a higher-income market

◦ Want to improve the sales of existing lower-priced products. Prestige of high-priced item makes brand look

better

Trading DownAdding a lower-priced item to a line of prestige products to encourage purchases from people who cannot afford the higher-priced product, but want the status.

Positioning: actions marketers take to create a certain image of a product in the minds of the customers

• In Relation to a Competitor• A common strategy when a firm is trying to solidify an advantage over

another firm. • Example: Southwest Airlines promotes itself as the low-cost alternative

• In Relation to a Product Class or Attribute (Features & Benefits)• http://www.youtube.com/watch?v=YUNjCx7w11k

• In Relation to a Target Market• Focusing on the unique characteristics of specific users can also be effective. • The …For Dummies series of instruction books are attractive to people who

want to learn about a topic from a source that doesn’t assume any prior knowledge on the reader’s part.

• By Price and Quality Offer economy, mid-priced, & luxury lines High Price = Quality Ford Mustang Low Price = Greater Value Ford Focus

• Difficult to change

Absolut Vodka◦ http://www.youtube.com/watch?v=EL4EsZv_ltU ◦ http://www.youtube.com/watch?v=Rt7eOs7iG2Y

Flash Cards - After 10 minutes into a lecture or concept presentation, have students create a flash card that contains the key concept or idea. Toward the end of the class, have students work in pairs to exchange ideas and review the material.

Product Life Cycle of Mobile Phone◦ http://www.youtube.com/watch?v=A-y0Q9uE0MM◦ http://www.youtube.com/watch?v=d-ZOOhsfZ-I