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Product-Mix Strategies

In: Business and Management

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Chapter 9 Product-Mix Strategies
A product mix is the set of all products offered for sale by a company.
A broad group of products, intended for essentially similar uses and having similar physical characteristics, constitutes a product line.
Marketing executives can choose from a variety of positioning strategies. For example for some products the best position is directly against the competition. Another strategy is associating the company’s product with (or distancing it from) a product class or attribute. Also certain producers and retailers are known for their high-quality products and high prices.
Product-mix expansion is accomplished by increasing the depth within a particular line and/or the number of lines a firm offers to customers. When a company adds a similar item to an existing product line with the same brand name, this is termed a line extension.
There are many reasons for line extensions but the main one is that a firm wants to appeal to more market segments.
Another way to expand the product mix, referred to as mix extension, is to add a new product line to the company’s present assortment. Under a mix-extension strategy, the new line may be related or unrelated to current products.
Improving an established product, termed product alteration, can be more profitable and less risky than developing a completely new one.
Another strategy, product mix contraction, is carried out either by eliminating an entire line or by simplifying the assortment within a line.
The life cycle of a product consists of four stages: introduction, growth, maturity, and decline. A product life cycle consists of the aggregate demand over an extended period of time for all brands comprising a generic product category, its reflects the total sales volume for a generic product category.
Every manager should choose a strategy to position his product but they can also...

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