managing product line and product mix

MANAGING PRODUCT LINE AND PRODUCT

MIXGROUP :2

PRODUCT

• Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.

• Products include: physical goods, services, experiences, events, persons,

places, properties, organizations, information, ideas

PRODUCT

CoreProduct

PRODUCT LINE

A group of products clubbed together by virtue of satisfying a particular class of needs or distributed through the same channel or possessing common physical and technical characteristics.

Dabur - Food, Shampoo, Hair oil

PRODUCT LINE ANALYSIS

• Product lining is the marketing strategy of offering for sale several related products.

• Line depth refers to the number of product variants in a line.

• Line consistency refers to how closely related the products that make up the line are.

• Line vulnerability refers to the percentage of sales or profits that are derived from only a few products in the line.

 PRODUCT LINE FILLING

• Product Line Filling is the process of adding a new product within the current range of an incomplete line.

• Motives for Line Filling. Weber’s Law: Customers are more attuned to relative than absolute difference. Line Modernization & Featuring

PRODUCT LINE- STRETCHING DECISIONS

New Products

Present Products

H H

HHH

H

Pri

ce

Pri

ce

Pri

ce

LL L L

L LQuality QualityQuality

New Products

New Products

New Products Present

Products

Present Products

Downward Stretch Upward Stretch Two-way Stretch

Nescafe Maruthi Titan

PRODUCT MIX• A Product mix is the set of all products and items

a particular seller offers for Sale.– Eg :- Dabur

Compenents are • 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.• The Depth of a product mix refers to how many

variants are offered of each product in the line.• The Consistency is the degree to which product

lines are related

DABUR

• Established in 1884 by D r. S. K. Burman

• Dabur India Limited is India's leading FMCG Company with interests in health care, personal care and foods.

• Dabur has two major strategic business units (SBU)- Consumer Care Division (CCD) and Consumer Health Division (CHD).

Length And Width

Hair Oils Shampoo Oral Care Skin care Health Supplements

Dabur Amla Hair Oil

Dabur Vatika Shampoo

Dabur Red Toothpaste

Gulabari Skin Care

Dabur Chyawanprash

Vatika Hair Oil

Babool Toothpaste

Dabur Uveda

Dabur Honey

Dabur Anmol

Promise Dabur Glucose

Meswak

Hair Oils Shampoo Oral Care Skin care Health Supplements

Dabur Amla Hair Oil

Dabur Vatika Shampoo

Dabur Red Toothpaste

Gulabari Skin Care

Dabur Chyawanprash

Vatika Hair Oil

Babool Toothpaste

Dabur Uveda

Dabur Honey

Dabur Anmol

Promise Dabur Glucose

Meswak

• The Depth of a product mix refers to how many variants are offered of each product in the line.

DEPTH

Hair Oil

Amla

Flower Magic

Mustard

Vatika

Enriched Coconut

Enriched Almond

Anmol

DEPTH

Shampoo

Vatika

Smooth & Silky

Black Shine

Dandruff Control

Total Protect

Root Strengthe

ning

CONSISTENCY

• The Consistency is the degree to which product lines are related

• It also refers to how closely related the various product lines are in end use, production requirements, distribution channels, or in some other way.

CONSISTENCY

• Dabur India mainly focus Personal Care and Health Care. The product line discussed are broadly classified in the above two category.

• Hair oils, Shampoo, Oral and Skin Care comes under Personal Care.

• Health Supplements comes under Health Care.

BCG Matrix

StarQuestion

mark

Cash cow

Dog

High

Low

High Low

Mar

ket

grow

th r

ate

Relative Market Share

BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.

According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.

THE BCG GROWTH-SHARE MATRIX

• It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:

Stars Question marks Cash cows Dogs

• It is based on the combination of market growth and market share relative to the next best competitor.

STARS

High growth, High market share

• Stars are leaders in business.• They also require heavy investment, to

maintain its large market share.• It leads to large amount of cash consumption

and cash generation.• Attempts should be made to hold the market

share otherwise the star will become a CASH COW.

CASH COWS

Low growth , High market share

• They are foundation of the company and often the stars of yesterday.

• They generate more cash than required.• They extract the profits by investing as little

cash as possible• They are located in an industry that is

mature, not growing or declining.

DOGS

Low growth, Low market share

• Dogs are the cash traps.• Dogs do not have potential to

bring in much cash.• Number of dogs in the company

should be minimized.• Business is situated at a declining

stage.

QUESTION MARKS

High growth , Low market share

• Most businesses start of as question marks.

• They will absorb great amounts of cash if the market share remains unchanged, (low).

• Why question marks?• Question marks have potential to

become star and eventually cash cow but can also become a dog.

• Investments should be high for question marks.

WHY BCG MATRIX ?

To assess : Profiles of products/businesses The cash demands of products The development cycles of

products Resource allocation and

divestment decisions

BENEFITS

• BCG MATRIX is simple and easy to understand.

• It helps you to quickly and simply screen the opportunities open to you, and helps you think about how you can make the most of them.

• It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability.

THANK YOU…….