Product mix strategies:
A company has several major strategic at its disposal, with respect to the width, depth and consistency of its product mix. One major management aspect involved in the product policy is the decision concerning product mix. The product mix is one of the elements in the product policy. The more important now a days since most of the manufactures are diversifying their products. The following strategies are generally employed by the producer or wholesaler of the product:
1. Expansion of the product mix: it is also referred to as diversification. A firm may expand its present product mix by increasing the number of product lines or increasing the number of product items within the same line. New lines may be the related or unrelated to the present product. For instance, a provision store may add drugs, cosmetics, baby foods, dry fruits etc.
2. Contraction of product mix: in certain circumstances, the management has to drop the production position is created in or unprofitable products. A firm may either eliminate an entire line or simply the assortment within a line this is termed as contraction of product mix.
3. Alteration of the existing products: as an alternative to developing a completely new products management should take a fresh look at the company's existing products. Often, improving an established product can be more profitable and less risky in developing a completely new one alteration may be made in the designs, size, colour, packaging, quality etc.
4. Positioning of the product: when a product can offer satisfaction in the manner the buyer gets, a strong position is created in the market. The product's position is the image which that product projects in relation to rival activities. A product's features will attract the customers or prove attractive to the customers. The positioning of the product is attained by:
- Product definition
- Market segment; and
- Market aggression.
There is a match between the product attributes and consumer expectations.
Trading up and trading down: trading up refers to adding of higher priced and more prestigious of their existing line, in the hope of increasing the sales of existing low priced products. In other words, when the marketer has already gained a good reputation through the marketing his low priced products in the initial stages and later on introduces high prices products, it is termed as trading up. For instance, a factory marketing terry cotton is trading up by introducing polyester. Trading down is opposite to trading up. A company is said to be the trading down, when it adds a lower priced item to its line of prestige products in the hope that people promote who cannot afford the original products, will want to buy the new one, because it carries some of the status of the high priced product.
Product differentiation and market segmentation: when there is a fundamental difference between one the product to another, there will be a product differentiation. The product difference involves developing and promoting an awareness of differences between the advertises products and the products of others. The purpose of this differentiation is to make one's product different from those of other competitions. A market consists of buyers and buyers who differ in one or more respects. They differ in their wants, resources, geographical, locations, buying attitudes, buying practical's etc. again buyers can be grouped in terms of sex, education, income, level, etc. this grouping of the buyers (segmentation the market) is said to be the market segmentation. That is, grouping the buyers, based on the income, age, education, etc, is called market segmentation.