A product line comprises products that are related. A company can have a product line of beverages, for example, coffee, and tea chocolate, among others. A product mix comprises of several product lines (Al-Aomar, 2000). The company can have the beverages in one product line and detergents used in home cleaning in the other product line forming a product mix. This paper looks at the methods a company can use to build and manage the product line and product mix.
Building and Managing Product Line and Product Mix
Assign Managers to Different Lines
Each product may have some specialized knowledge from production, marketing, and sales. It is therefore essential to have someone who will concentrate on one line. Most of the time, customers for various products are different (Malik & Sullivan, 1995). The company should not specialize in one promotional strategy.
Meet the Customers’ Demand
It is good to add some product lines, but it should only be done when the company has the capacity to produce. For example, it is not appropriate to start producing detergents when the company is not able to meet the demand for the previous product may be beverages. The management should consult with the production department to ensure that labor and other resources are adequately utilized (De Loecker, 2011).
Going for the Depth
Specializing with depth means increasing the offering in one product line. Investing in new products is expensive (Mayer et al., 2014). For example, when a company is producing pencils which is one type of stationery, it is better to add more products in the same line. The company can add various types of pens. If the company decides to introduce a new product, for example, clothes, there is a lot of costs which shall be added. The customers also will be different, and hence different marketing strategies will be used.
For a company to be successful, it is essential to manage the product mix and product line. Different product lines should be handled differently since the customers are not the same. Before investing in other products, it is critical to meet the customers' demands. Companies should produce more products that are almost on the same line to reduce the production cost.
Al-Aomar, R. (2000). Product-mix analysis with discrete event simulation. In 2000 Winter Simulation Conference Proceedings (Cat. No. 00CH37165) (Vol. 2, pp. 1385-1392). IEEE. https://ieeexplore.ieee.org/abstract/document/899114
De Loecker, J. (2011). Product differentiation, multiproduct firms, and estimating the impact of trade liberalization on productivity. Econometrica, 79(5), 1407-1451. https://onlinelibrary.wiley.com/doi/abs/10.3982/ECTA7617
Malik, S. A., & Sullivan, W. G. (1995). Impact of ABC information on product mix and costing decisions. IEEE Transactions on Engineering Management, 42(2), 171-176. https://ieeexplore.ieee.org/abstract/document/387268
Mayer, T., Melitz, M. J., & Ottaviano, G. I. (2014). Market size, competition, and the product mix of exporters. American Economic Review, 104(2), 495-536. https://www.aeaweb.org/articles?id=10.1257/aer.104.2.495
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