Product mix decision pdf

As a physical product, marketers need to consider packaging, labelling and branding involved in marketing the. The first of the product mix decisions refers to the product mix width. Alternatively, the reduced costs for all decision variables can be computed directly from the shadow prices on the structural constraints and the objectivefunction coef. In cost accounting, product mix refers to the mix of products you produce. Ch8 managing products, product lines, brands, packaging. The international marketer should decide whether to sell the same product abroad as at home, or modify it for the new market or develop an entirely different product. The concept of creating a product mix is important to companies that dont want to rely on one product only. Product decisions or policy and strategy are concerned with the management of the products product portfolio and brand management a product is any offering to the market for attention, acquisition, use or consumption that might satisfy a need. Sensitivity analysis 3 massachusetts institute of technology. The width is all about the number of different product lines the company carries. Price will influence customer decisionmaking for choosing travel agents. Product mix contraction is achieved either by eliminating an entire product line or eliminating a few product items or brands from within a line. Number of different product lines carries by the company.

These elements will be briefly presented after analyzing all the stages of the buying decision process. That is, the profit margin for a company like walmart may not be high, but so long as most of its products have strong sales, it is in no danger of bankruptcy. In offering a product line, companies normally develop a basic platform and module that can be added to meet different customer requirements. A product mix consists of product lines, which are associated items that consumers. In many real life problems, uncertainty is a major complexity for decision makers. Product line is a group of related products manufactured or marketed by a single company. The length of the product mix shows the number of different products in a product line.

Productmix decision with compromise lp having fuzzy objective function coefficients clpfofc. It can be argued that product decisions are probably the most crucial as the product is the very epitome of marketing planning. Understanding the basics of a product mix will help you understand why it is so important to your organization. Generally speaking, a company offering a wider product mix carries less risk but also usually has a lower profit margin. Advertising messages paid for by a sponsor, delivered through media. Learn vocabulary, terms, and more with flashcards, games, and other study tools. This enables an analysis of the constituency of the product mix to be made. Product mix decision making pmdm definition operations. These decisions apply to any kind of product and service and set the base for all other decisions.

The overall product mix offering tends to be quite a strategic one as it pushes or restricts the brandfirm into competing in different parts of the marketplace. The contribution of this thesis is a new productmix decision model that uses activitybased cost information. Companies diversify for several reasons and in several ways. Part 6 relevant costs for decision making constrained resource duration. Product mix overview, dimensions and practical example. In the development and marketing of individual products and services, individual product decisions need to be made. There are various decisions which the management of a company should take about products we should sell, different categories of products, different versions of products, etc.

Product decisions marketing mix describes how a business uses and manipulates the 4ps to market their product. Product mix, also known as product assortment, refers to the total number of product lines a company offers. The goal was to design a simple model of these phe nomena for aiding product line decisions. Decisions regarding the product, price, promotion and distribution channels are decisions on the elements of the marketing mix.

The width of the mix refers to the number of product lines the company has to offer. Number of different, so if the line is canned soups then you might have certain types of soups. Businesses employ different strategies when marketing products compared to services. For example, a car wash might offer a quick drivethrough wash for people looking to spend only a few dollars, a hand.

The influence of the internet on the consumer decisionmaking process, with specific reference to the influence on different stages of the process, will be discussed in chapter 4. Pdf productmix decision with compromise lp having fuzzy. The level of productsupport services provided can also have a major effect on the appeal of the product to a. The proposed model considers fuzziness in presence of. Total number of items in the product mix of the company. Individual product decisions decisions in the development and marketing of individual products.

The relationship between marketing mix and customer. Product mix the set of goods and services a company provides. A product mix is defined as the number of product lines that a company sells. Every company deals with limited capacity, so smart decisions about product mix can greatly increase your profit. Product is defined as anything that is offered to public for purchase by the company. Now that you have a clear idea of what is are a product and a service then we can go on to the product mix decision. For example, when you go to a restaurant, the food is a product but what the waiter does is a service. Simply, it shows the number of items in the product line. Product definition a productservice is the most important component of the marketing mix being the centre of focus as the offer to the market. A product line refers to a unique product category or product brand a company offers. Timedriven activitybased costing as pointed by tsai et al. According to kotler and keller 9 suggests consumer buying decision is the stage where the consumer is also possible to form the intention to buy the most preferred product, where the consumers decision to modify, delay, or avoid highly. Pdf on aug 1, 1974, jerry wind and others published product portfolio.

In this view, the shadow prices are thought of as the opportunity costs associated with diverting resources away from the optimal production mix. Productmix decisions are central to marketing strategy, and are a. Product line breadth refers to how many or how broad is the range of products offered by the firm. In the overall product mix decision, a firm needs to consider product line. A product mix is a group of everything a company sells. The influence of quality products, price, promotion, and. Such products function in similar manner, sold to the same customer group, sold through the same type of outlets, and fall within a same price range. A fuzzy multiobjective linear programming model having probabilistic constraints is demonstrated in order to make productmix decision. A company like hul has numerous product lines like shampoos, detergents, soaps etc. Although product mix problems are seldom encountered in their simple textbook form in practice, they very frequently constitute important. Individual product decisionprinciples of marketing read. Product mix decisions arise as soon as an organization has several product lines. A product mix is an important consideration for any firm.

And another decision companies have to make with regard to the. Capacity and product mix in cost accounting dummies. A new approach to the product mix decision find, read and cite all. The constituents of marketing mix are said as marketing mix elements. Set of all productsitems that a part sellers offers for sale to buyers. Pdf fuzzy multiobject linear programming application in. The product mix is a subset of the marketing mix and is an important part of the business model of a company. The breadth of a product mix shows the different kinds of product lines that firm carries. Formulating and solving a linear programming model for. Public relations includes building good relations with the public by obtaining good publicity, building up positive corporate image.

For example if a company produce only soft drinks and juices, this means its mix is two products wide. The marketing mix, which is the means by which an organisation reaches its target market, is made up of product, pricing, distribution, promotion and people decisions. The consistency of a product mix refers to how closely related are the companys product lines in terms of characteristics, production process, distribution channels to name just a few. A company may have a single product line in which case its product mix becomes the number of products being offered in the line length. Product mix constitute width, length, depth and consistency. Product mix, also known as product assortment or product portfolio, refers to the complete set of products andor services offered by a firm. As explained, product mix is a combination of total product lines within a company. The product mix constitutes all individual product items and product lines the company markets. An activity based costing and theory of constraints model. Productmix decision from the perspective of timedriven. On the other hand a company may have number of product lines each of which may then have a number of products indicating width. Four important dimensions of a product mix can be identified. A typical example to such a case is product mix problem. What is meant by product line, length, breadth, consistency and depth.

Product mix is an important consideration for businesses that have large product or. The objective of this thesis is to demonstrate the use of the activitybased costing abc approach together with the theory of constraints toc philosophy in determining the optimal productmix and restrictive bottlenecks of a company. Each element is also referred as mix, for example, product mix, price mix, promotion mix, and place mix. However, the product line is a subset of the product mix.

The product mix is the variety of products a company produces or sells to the marketplace. But what is a product mix, and what product mix decisions. The product mix is a concept with four different dimensions. The combination of all these product lines is the product mix. Product mix decisions in marketing management tutorial. Managing product, product lines, brands, packaging 5 companys decision making on product relates to. This dimension of the product mix represents the extent to which the activities of the firm are diversified. Decisions on a productmix level product decisions at the productmix level tend to determine the width of a. Mba notes marketing management product mix decision what is product mix. The product package and labeling are also important elements in the product decision mix, as they both carry brand equity through appearance and affect product performance with functionality. It offers the ability to expand your customer base by offering more products in more niches. A mathematical modeling approach to product line decisions.

A product line often evolves, as manufacturers want to take advantage of a brands value and the success of other products in the mix. The product mix is described in terms or width and depth. Retailers carry a mixture of products to satisfy various customers. You just need to work out the most profitable product mix. Now to develop a linear programming model to determine the productmix of each of the products such that the total profit maximized. Product mix decisions width, length, depth and consistency. Combination of all the product lines constitute the product mix. Marketing the same product around the world is practical when culture has no. Product mix or product assortment refers to the number of product lines that an organisation offers to its customers. To receive additional updates regarding our library please subscribe to our mailing list using the following link. The idea is to weed out lowprofit and unprofitable product items or product lines and earn higher profits from fewer products. The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. A productmix decision model using green manufacturing technologies under activitybased costing wenhsien tsaia, huichiao chena, junder leua, yaochung changa, thomas w. Some add variations of their products to maximize sales.