Factors influencing changes in product mix, Marketing Management

Factors influencing changes in product mix

1.       Change in market demand: the change in the demand of a product (due to change in habits, fashion, purchasing power, income, attitudes and preferences of consumers) affects the decision of product mix.

2.       Cost of production: if the company can develop a new product with the help of the same labour force, plant and machinery and techniques, it can decide to start the production of that product at lower cost.

3.       Quantity of production: if the production of new product is considered to be at a large scale and the company can add one more item to its product line just to get the economics of large scale production. Keeping in view its production capacity and other factors.

4.       Advertising and distribution factors: Advertising and distribution factors may be the one of the reason for the changes in production mix. If the advertising and distribution factors organization are the same, the company may take the decision to add one more item to its product line.

5.       Use of residuals: if residual can be used gainfully, the company can develop it's by products into the main products. For example, a sugar mill can profitably develop the production of paper card board or wine from biogases.

6.       Change in company desire: keeping in mind the objectives of the firm, maintaining or increasing the profitability of the concern, the firm may eliminate some of its unprofitable processes or may start a new more profitable product. In this way, the firm tries to make its product mix an ideal one.

7.       Competitions actions and reactions: the decision of adding or eliminating the product may be the reaction of competitor's actions. If company thinks that it can meet the competition well by making necessary changes in the size, colour, packing or price, it can make such changes.

8.       Change in purchasing power or behaviour of the customers: if the numbers of customers are increased with the increase in their purchasing power or with the change in their buying habits, fashion, etc. the company may think of adding one or more product keeping mass production or increase in profitability in the mind.

9.       Full utilization of marketing capacity: if the company is not getting desired results from the market, it can decide to stop the production of such a product and divert its resources to produce a new product or improve the existing product, according to the needs of the consumers.

10.   Financial resources: finance is the life blood of the firm. Availability of the finance may necessarily some changes in the product of the company. If the company is short of finance or if the product is continuously going into loss the company may decide to drop such production similarly, if the company has sufficient funds, it may improve its products.

Posted Date: 9/19/2012 6:40:13 AM | Location : United States







Related Discussions:- Factors influencing changes in product mix, Assignment Help, Ask Question on Factors influencing changes in product mix, Get Answer, Expert's Help, Factors influencing changes in product mix Discussions

Write discussion on Factors influencing changes in product mix
Your posts are moderated
Related Questions
Explain the concept of Web marketing. Web Marketing: It is also termed as online marketing implies marketing the organizations products onto the virtual medium. In format

What is Commercialization or Crash Introduction Strategy Development? Commercialization or Crash Introduction: A crash introduction is about full scale commercialization


What is position on product features? Position on Product Features: Product may be positioned upon basis of its features onto advertisement might effort to position the p

Create a context and Level 0 diagram for a Clothing store production scheduling system. The purpose of the production scheduling system is to respond to the Production order(sub

State the term- Channels of distribution You are aware that when a manufacturer of a product is located at one place, its consumers are located at innumerable places spread all

Brand loyalty: The starting point in understanding brand equity is the extent to which a brand enjoys customer loyalty. It is important to discriminate between habitual buying

Deciding on media for advertising: Deciding on reach, frequency, and impact: media selection involves finding the most cost -effective media to deliver the desired number of e

The company 2TW manufactures and sells products overall Europe and is organised into dozens of strategic business units (SBUs). SBU managers, who report to regional directors, have

A World of Marketing Communications All organisations - small and large, commercial, government, charities, educational and other not-for-profit organisations - need to communi