I’d like to continue where we left off on Product Development with the Product Mix Strategy. The Product Mix is essentially the strategy in which a company would market its products.
The Product Mix can be expanded internally and externally. Internally refers to the development of such product and these steps were covered in the previous marketing article on product development. Externally refers to the growing spand of the company and an example of this would be Fedex acquiring Kinkos to expand its breadth of products and services. There are also three methods of expanding the Product Mix. The first method is product positioning which is the perception the market has of that product compared to other products of that company or of a competitor. The marketer can position its products for profitability by positioning the product to meet the market’s needs, as a differentiated product, and to minimize cannibalization. The second method is product differentiation which should focus on distinguishing the differences of the product physically, packaging, branding, and promotion to achieve more price inelasticity. The third method is trading up to improve company image or trading down to rebuild company reputation. Therefore, the Product Mix may provide a fresh method to marketing products.
When marketing your products however, you should be aware of the Product Life Cycle (chart shown below). The Product Life Cycle is the life cycle all products will eventually experience albeit all products will likely take longer or shorter time to pass through any particular stages. The Product Life Cycle includes the four stages: introduction, growth, maturity, and decline. In the intro stage, there really isn’t much competition as those who are introducing the product are innovators seeking to create the primary demand of the new product. The growth stage begins to introduce intense competition and a more selective demand starts to arise focused on the different brands associated with this new product category. The maturity stage starts to drop off competitors and consumers build brand loyalty towards the remaining companies who are providing the best of these new products. But the decline stage continues to lessen competition and the couple of companies who continue selling this now older product will begin to milk the remaining profitability and the market for this product will contract and become a niche or dissipate.
Marketers can prolong the inevitable by prolonging the Product Life Cycle by doing something called Line Extension. Within Line Extension there are three primary methods of prolonging the products viability in the market. The first method includes getting more usage from current users. A great example is Oreo cookies as they continuously diversify their product by adding new iterations of their popular Oreo concept by adding new themes with different captivating flavors. A recent example is Sony reintroducing the Sony Walkman for enthusiast Audiophiles. The second method is getting new users from new market segments. Using the first example, Oreo had done this by reducing the cookies’ calories for those who are more health conscience. A recent example is targeting tablets for children as a learning device that can also be used for entertainment. The third method is to find a new use of a product or pursuing a cross sales strategy. Using the first example, this could be the marketing of eating Oreo cookies alongside a cup of milk. A recent example is the Sengled Snap which is a light bulb with a built-in camera and speaker.
In conclusion, just putting a product out there in the market without considering the expansion of the Product Mix, the Product Life Cycle and Line Extension is a wasted opportunity. The marketer of a company should establish the right Product Mix for their product to provide the best opportunity to achieve success and to remain a viable product category in the market.
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