Product Mix, Product Lines & Cannibalization
The number of items in each product line is called the Product Mix length. For example Hindustan Unilever has Breeze, Hamam, Lifebuoy, Lux, Rexona, Le sancy and Liril in its soap line. The width of the product mix refers to the number of product lines a company has.
One typical example is Amul. The product lines of Amul are Bread Spreads, Milk Drinks, Powder Milk, Fresh Milk, Cheese, Cooking, Desserts & Health Drinks. Each line has several products to offer. You can view the product line of Amul here
There may be a number of reasons to alter either an existing product or a product line. These reasons may include supporting the marketing strategy, Improving sales, Expansion of market share etc. The product line can be altered by altering one or more of the following attributes.
- Composition of product line
- Expansion or contraction of the product line
- Value addition
- Brand Image
- Physical characteristics
Addition of new products to a product line is expanding the product line. The product line may be too long of reducing product line length results in more profits. The product line may be too short if addition of new products increases profits. When a range of product line (often the price range) is increased it is called line stretching. When a company operates at the lower end of the market and introduces new products to enter the upper market, it is called upward stretching. This is done by introducing premium products and services. If a company working in a high end market introduces new products to enter the lower markets as well, this is called downward stretching. Many companies start with higher end and move towards the lower end. For example parker started selling premium pens , out of reach to many of the consumers and later the company introduced the lower end products. The lower end market products are also called budget products. The Budget products are advertised heavily to bring the customer to the entire product line of the company.
If a company works in a moderate market and decides to survive both the low end and upper end of the market is Two Way Stretch.
There is one more concept called cannibalization. Cannibalism is the act of any animal consuming members of its own type or kind. In marketing, Cannibalization refers to a reduction in the sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer. Introduction of diet Pepsi or diet coke may eat up some of its sales of regular coke or Pepsi. Introduction of a new car may eat up the sales of an older model of the same car.