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{i=1}^{n} Li

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