these slides explain the product hierarchy and product mix in easy way with the help of examples.

1. PRODUCT HIERARCHY AND
MIX
Prepared By
Amaresh Tyagi
Asst. Professor
HIMT Group of
Institutions
Greater Noida

2. Product Hierarchy
The product hierarchy stretches from basic needs to
particular items that satisfy those needs. There are six
levels of products hierarchy .
1. Need family – The core need that underlies the
existence of a product family.
2. Product family – All the product classes that can
satisfy a core need with reasonable effectiveness.
3. Product class- A group of products within a product
family recognized as having a certain functional
coherence. It is also known as product category.

3. Example of product hierarchy using a cooker

4. Continued
4. Product line - A group of products within a product
class that are closely related because they perform a
similar function, are sold to the same customer groups,
are marketed through the same outlets or channels, or
fall within given price ranges.
5. Product type - A group of items within a product line
that share one of several possible forms of the product.
6. Item – A distinct unit within a brand or product line
distinguishable by size, price, appearance, or some
other attribute.

5. PRODUCT MIX

6. Product systems and mix
A product system is a group of diverse but
related items that function in a compatible
manner.
e.g. Redmi Y1 product includes headphone,
cable, cases and car accessory.
A Product Mix (also called a product
assortment) is the set of all products and
items a particular seller offers for sale.
A product mix consists of various product lines.

7. Product Line
Product line refers to a group of products that are
closely related because they satisfy a class of
needs, are sold to the same customer groups ,
are marketed through same type of outlets or
channel.
A company’s product mix has a certain width,
length, depth and consistency.-
The width of a product mix refers to how many
different product lines the company carries.
The length of a product mix refers to the total
number of items in the mix.

8. The depth of a product mix refers to how many
variants are offered to each product in the line.
The consistency of the product mix refers to
how closely related the various product line
are in end use, production requirements,
distribution channels or some other way.

9. HUL Product Mix

10. Product line decisions
These can be :
1) Line stretching
2) Line filing
3) Line pruning
Line stretching - It occurs when a company lengthens its
product line beyond its current range. The company can
stretch its line down market, up market, or both ways.
a) Down market stretch – A company positioned in the middle
market may want to introduce a lower – priced line for any
of three reasons:
i) The company may notice strong growth opportunities.

11. ii) The company may wish to tie up lower end competitors who
might otherwise try to move up market.
iii) The company may find that the middle market is stagnating
or declining.
b) Up market stretch – Companies may wish to enter the high
end of the market to achieve more growth, to realise higher
margins, or simply to position themselves as full line
manufacturer.
c) Two way stretch - Companies serving the middle market
might decide to stretch their line in both direction .

12. 2. Line filling -
A firm can also lengthen its product line by adding more items
within the present range.There may be several reasons for line
filling-
 Reaching for incremental profits
 Trying to satisfying dealers who complain about lost sales
because of missing items in the line
 Trying to utilize excess capacity
 Trying to be the leading full- line company
 Trying to keep out the competitors

13. Line pruning -
It means dropping weak items from product line.
In other words, it means reducing the depth of a
product line by deleting less profitable offering
in a particular product category.

14. Product mix strategies
1. Expansion of product mix
2. Contracting or dropping the product
3. Alteration of the existing product
4. Development of new uses for existing
products
5. Trading up and trading down- trading up
refers to the adding of higher priced prestige
product to the existing lines with the
intentions of increasing sales of the existing
low priced product and vice versa.