Product Decisions, Product Lines & Product Mix

Individual Product Decisions

• Managers make three nested sets of decisions:

  • Individual product & service decisions

  • Product line decisions

  • Product mix (portfolio) decisions

• Focus of this lecture: the individual layer and how it connects upward.

Product & Service Attributes

• A product is purchased as a bundle of attributes.

  • Analogy: just as people possess height, eye–color, age, etc., products possess their own measurable/observable characteristics.

• Typical attribute dimensions

  • Quality (performance, conformance, durability)

  • Features (functional extras that solve problems)

  • Style (aesthetic surface) & Design (how form supports function)

  • Price (monetary expression of value)

  • Size/Weight, Materials, Technology specs (e.g., phone screen size)

• Consumer viewpoint: evaluating attributes = evaluating value proposition.

Branding

• Formal definition (lecture): “A name, term, sign, symbol, design, or a combination thereof that identifies a seller’s goods/services and differentiates them.”

• Key take-aways from Marty Neumeier’s expert video:

  • Branding is not merely a logo (a logo is merely a symbol of the brand).

  • Branding is not just a product (the product is a tangible entity; the brand is intangible perception).

  • Branding is not a promise, advertising slogan, or cumulative impressions—those are inputs, not the brand itself.

  • Brand = “a customer’s gut feeling” about a product, service, or company.

  • Therefore each consumer effectively holds a unique version of the brand in their head/heart.

  • Branding is the result of many corporate activities (product design, employee behavior, culture, communication, finance approvals, etc.).

  • Practical implication: designers & managers must start with the intended perception/outcome, not merely the artifacts.

Packaging & Labeling

• Packaging = designing the container, wrapper, or exterior the product arrives in.

  • Functions: protect, inform, differentiate, and attract attention at the “last three feet” (the shelf battle).

  • Considered a tangible marketing tool: the final brand touch-point screaming “Choose me!”

• Labels/logos on the package supply legally required info and reinforce positioning cues (e.g., organic seal, flavor callouts).

• Good packaging aligns with brand identity & supports attribute communication (quality cues, environmental message, etc.).

Product Line Decisions

• Product Line = a group of closely related products marketed under a single category umbrella.

  • Ex.: Coca-Cola’s Soda line vs. Water line.

• Major structural choices

  1. Breadth / Width (how many distinct lines exist)

  2. Length (how many individual products reside within a given line)

  3. Depth (number of variants/forms per product)

  4. Consistency (how closely related lines are—mentioned implicitly through examples)

• Objectives when adjusting a line:

  • Fill gaps in consumer segments

  • Up-sell (higher quality) or down-sell (lower price) tiers

  • Manage cannibalization & shelf space

Key Metrics (expressed mathematically)

Here are the mathematical definitions for key product line and product mix dimensions:

• Let $n$ represent the total number of distinct product lines within a company's entire product mix.

• Let $L_i$ denote the length of an individual product line, specifically line $i$. This measures the number of unique products within that line.

• Let $D_{ij}$ represent the depth of a specific product $j$ that resides within line $i$. This indicates the number of variants or forms available for that particular product.

Using these variables, the key metrics are defined as follows:

• Product Mix Width: This is the total number of product lines a company offers.
  $\text{Product Mix Width} = n$

• Product Line Length: This refers to the number of individual products within a specific line $i$.
  $\text{Product Line Length}{(i)} = L_i$

• Product Depth: This is the number of variants for a particular product $j$ within a line $i$.
  $\text{Product Depth}{(ij)} = D_{ij}$

• Product Mix Length: This is the total number of all individual products across all product lines. It is calculated by summing the lengths of all individual product lines.
  $\text{Product Mix Length} = \sum<em>{i=1}^{n} L</em>i$

Product Mix (Portfolio) Decisions

• Product Mix = all product lines & items a firm sells.

  • Synonyms: product assortment, portfolio.

• Critical dimensions

  1. Width (number of lines)

  2. Length (total # of items across lines)

  3. Depth (variants per item)

  4. Overall consistency (strategic coherence, shared R&D, channels)

• Strategic levers

  • Stretching: add new lines (increase width)

  • Filling: add items within a line (increase length and/or depth)

  • Pruning: drop underperformers to improve profitability and clarity

Coca-Cola Case Study: Applying Product Mix Concepts

• Data sample: 39 SKUs commonly found in a U.S. grocery ($\text{Mix Length} = 39$).

• Identified product lines (sample only):

  1. Soda (largest line)

  2. Juice

  3. Water

  4. Tea

  5. Milk

  6. Energy (emerging)

• Width example

  • Considering Soda & Juice only $\rightarrow$ width = $2$

  • Including all six categories above $\rightarrow$ width = $6$

• Soda line specifics (illustrative):

  • Length $= 7$ distinct sodas: Coca-Cola, Diet Coke, Coke Zero, Sprite, Fanta, Barq’s, Schweppes.

  • Depth varies by item:

  • Coca-Cola: $D = 4$ (e.g., 12-oz can, 20-oz bottle, 2-L bottle, specialty glass bottle)

  • Fanta: $D = 1$ (example list displayed only one variant; real-world depth >1)

• Juice line specifics:

  • Length $= 3$ products: Simply Orange, Minute Maid, Fresca

  • Minute Maid depth $= 3$ (three flavors/sizes shown)

• Water line specifics:

  • Length $= 2$: Dasani, Smartwater

• Observations

  • Coca-Cola strategically varies depth within high‐volume items to capture usage occasions.

  • Niche lines (e.g., Milk/Fairlife) remain short and shallow, reducing complexity.

Ethical, Practical & Strategic Implications

• Branding as perceived reputation raises stakes for consistent corporate behavior (ethical lapses harm all lines).

• Packaging waste vs. shelf impact: environmental responsibility must be balanced with marketing effectiveness.

• Line stretching can democratize a product (down-market) or premiumize (up-market), influencing consumer access & brand equity.

• Portfolio complexity impacts supply-chain emissions, cost structure, and in-store clutter—managers must weigh incremental revenue against these practical concerns.

Links to Previous / Foundational Concepts

• Segmentation–Targeting–Positioning (STP): line & mix decisions operationalize positioning for distinct segments.

• Value proposition framework: attributes + brand + packaging jointly deliver communicated value.

• Marketing mix 4 P’s: Product decisions interact with Price, Promotion, Place (e.g., packaging influences promotion at shelf).

Quick-Reference Cheat Sheet

• Product Attribute = any characteristic consumers evaluate (quality, feature, design…)

• Brand = customer’s sustained gut feeling; logo is