2 11 PRODUCT MIX PRODUCT MIX The Product
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2. 11 PRODUCT MIX
PRODUCT MIX • The Product Mix also called as Product Assortment, refers to the complete range of products that is offered for sale by the company. . For example, the product lines of ITC are FMCG, Hotels, Paper Board and Packaging, Agribusiness. The product mix has four dimensions: Breadth, Length, Depth, and Consistency.
PRODUCT MIX • A product mix is defined as the number of product lines that a company sells. . On the other hand a company may have number of product lines each of which may then have a number of products indicating width.
• Product line pricing is used when the prices within the product line is kept variant so that the customer purchases one or the other product within the product line. If Philips has a line of Mixer grinders, then it will have one in the lower range, one in the medium range and one in the higher range, so that it can satisfy each type of customer. When you want to plan product mix pricing, you have to ensure that target markets of the complete product line are covered.
• Optional feature pricing • Many a times, an organisation charges extra for an added feature that it provides and the prices are kept on the basis of the feature which is being provided. Hotels and resorts will charge more for Scenery facing views. Similarly in core products, products like the Hyundai I 20 come in 3 variants – Asta, Magna and Sportz, each of them cheaper then the previous one based on the features they provide (Asta being the costliest). As the features increase, so thus the pricing.
• Captive product pricing • It is a smart manoeuvre by the likes of Hewlett Packard and Gillette which are dominating their respective markets. These companies have introduced the main product at very low cost (Printers and Razors) and they are selling the supporting products or the ancillary products at a good margin. • Two part pricing • When we go to an amusement park, there is a basic entry fee and then the fees for each ride is separate and the refreshments are also separate. This is known as a two part fee. The initial fee is for the maintenance of the amusement park and the second fee is for the maintenance and the profits of the amusement rides within the park.
• 5) By Product pricing • By product pricing can simple be explained with the example of Crude oil. Companies like British Petroleum and Shell deal in a lot of Crude Oil and these companies also provide the finished goods like oil and petrol. So the pricing of the raw material as well as its by product is kept different. Generally, it is kept on the basis of cost of production of the by product. A similar pricing is observed in coconut oil production where the remaining coconut is rich in fibre and can be used as fertiliser. Sugarcane is used to make Sugar but after making sugar, the cane is sold off to building material manufacturers and sold off as Wood material.
• 6) Product bundling pricing • Generally most product line prices deal with an individual product but a product bundling price deals with the combination of multiple products. On any given weekend, you will see the magic of Product bundling price whenever you see the promotional section of your newspaper.
