Page 134 - DMGT408DMGT203_Marketing Management

Unit 6: Products, Services and Brands

but it bought parts later, thereby benefiting from the fact that prices of components used Notes
to make PCs typically declined 25 to 20 per cent per year. Additional savings from
eliminating intermediaries in its distribution channel made Dell’s cost advantage over its
competitors a substantial one.
Given its lower cost structure than its competitors, Dell’s custom-built, low-cost positioning
in the market place allowed it to make an attractive strategic choice. Should it choose to
reap higher margins than others in its industry, or should it keep prices low to gain
market share? For much of its history, Dell made the latter choice, gaining share at the
expense of its rivals.

Product Line and Product Mix

Most companies generally market several products rather than just one or two. It is necessary
for them to understand the relationship among all their products to coordinate their marketing
of total group of products. Product item, product line, and product mix concepts help us understand
the relationships among a company’s different products.
A product item refers to a particular version of a product that is distinct, such as Surf Excel is a
(premium) product item offered by Hindustan Lever Limited. A product line is a closely related
group of products for essentially similar use, and technical and marketing considerations. Colgate
product line includes Colgate Dental Cream, Colgate Gel, Colgate Total, Colgate Herbal, etc.
Product mix is the total number of products that a company markets. Product mix consistency
means how closely related different product lines are in end-use, production requirements,
distribution, etc. A company may have many product lines in its product mix. The term product
mix width refers to the number of product lines a company has. Product line length means the
number of product variants available in a company’s product line.

Product Line Decisions

Many companies start as a single product item or product line business. After getting a taste of
success and with availability of more resources, companies decide to expand their product line
and/or introduce newer product lines in consonance with market opportunities or in response
to competitors’ moves.

Figure 6.1: Selected Product Mix Elements in Just Three Product Lines of HUL

Product Mix Width (No. of Product Lines)

Product Product Product Product
Line - 2
Line - 1 Products Beverages Cosmetics
Line - 3
Line - 4
Laundry
Bathing
Soaps
Product Line Length (Number of product item within a product line) Dove Surf Lipton Green X
Rin
Label
Lux
Sunlight
Brook Bond
Pears
Y
Liril
Red Label
Wheel
Taj Mahal
Rexona
501
Z
Lifebuoy
Bru
Breeze
Taaza (Lipton)
Moti
Super Dust
Hamam
Jai
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