Decisions regarding the product, price, promotion and distribution channels are decisions on the elements of the marketing mix. Joint pricing, assortment, and inventory decisions for a. Product mix and product line understanding product length. View notes ch 11 product mix and product line decisions. Adobe provides everything you need to design and deliver exceptional digital experiences. Krishnan wenge zhu october 21, 20 abstract distributed product development is becoming increasingly prevalent in a number of industries. Product line decisions are modeled using a bayesiannash equilibrium concept where firms form beliefs about the profits of their competitors and anticipate the prices and demand they would observe for any given set of products that could be introduced in the market. In this paper, we propose and empirically estimate a descriptive model of firm. We consider a multiproduct monopolists product line and pricing decisions under the explicit assumption of two status externalities. This may be attributed to both the paucity of empirical contributions to this aspect of product line management and the shortcomings of the normative product elimination approaches that have been forwarded.
Decisions on a productline level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. Expanding the product line is the second one of the product line decisions. Product line definition and meaning collins english dictionary. Before turning to the product mix decisions, we first have to know what the product mix actually is. Modeling consumer preferences for statussignaling brands. Pdf a mathematical modeling approach to product line. Jan 17, 2007 consider a set of product variants that are differentiated by some secondary attributes such as flavor, color, or size. Urban and others published a model for product line decisions find, read and cite all. F a i r d e a l i n g s h o r t e x c e r p t reading. At other times, managers will feature a highend item to lend prestige to the product line. Product line decisions building a strong product line. How are relevant revenues and costs used to make decisions. For instance, a company might want to maintain longer product lines to protect against economic swings. July 2012 these lecture notes cover a number of topics related to strategic pricing.
Analysis strategies for software product lines 3 we refer the reader to a recent survey benavides et al. Managing product line and product mix business market. In the present paper, reputation is approached as an idea involving status. The basic product policy strategy issues at the product line level cluster around the following questions. Product decisions are based on how much the organisation has to adjust the product on the standardisation adaptation continuum to differing market. Businesses employ different strategies when marketing products compared to services. Product line decisions are difficult because the prod. In the product era, the goal was to build a better mouse trap and it was assumed that buyers will flock the seller who does it. The 3 types of product line stretching and why companies take. The paper attempts to find what are the main issues a manufacturer selling through a distribution channel has to worry about when designing the product line. Pdf download for an empirical analysis of firms product line decisions. We study how the global distribution of product development impacts the pro. Product line decision free download as powerpoint presentation. The consequences of a poor pricing decision, therefore, can be dire.
After the final decision was made, we looked at raw material inventories to. Productline selection, production decisions and allocation. Expansion of product line process of adding more products to the line valid only if. The 3 types of product line stretching and why companies. Download or order product literature, like the product brochure, specification and price books, doorstyle finish codes, and 2020 design updates. We begin our discussion ofpricing by considering the perspective of the customer. Chapter 7 how are relevant revenues and costs used to make decisions bob lee is president of best boards, inc. Product line and product mix have direct relationship. Discuss the various product line decisions marketers make and how a company can expand its product line a product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. Physical object, service, person, place, organization, idea. The report describes product line analysis in the context of product line development and shows how a requirements model is built based on object modeling, use. Review of the product will also show the necessary areas of improvement that a certain product needs in order to work on being more appealing to the target market. Trading down introducing a low priced product to the prestigious line so as to cater increased demand.
A mathematical modeling approach to product line decisions. Mar 14, 2020 the width of the product mix is equal to the number of product lines within a company. Product line brand names may be used if a company has more than one product line. This is related to all the product mix and line decisions we have to take in a. Product line optimization, choice modeling, decisionsimulator summary a global manufacturer of specialty personalcare products needed to develop a response to major changes made to the category leaders product line. Sometimes a company finds one end of its line selling well and the other end selling poorly. They can not be individoptimum product line ually optimized and then added to produce results. A product is a combination of physical attributes say, size and shape. While many costs are directly assignable to individual products, common costs have historically presented a difficult conundrum. An empirical example applying the a priori model to a product line decision suggests that the model. You may also go through our sales analysis templates. Generally, there are three price bands which exists in any market lower priced products, middle priced products and premium products. In section 2, we give a short introduction to software product lines using a running example and we present an overview on important software analysis that have been applied to soft.
Jul 23, 20 trading up adding a high priced prestigious product to the line so as to increase the sales of the existing low priced product. The product mix, also called product portfolio, is the set of all product lines and items that a company offers for sale. The problem of the product line design for a distribution channel is modeled with the manufacturer, the retailer or several competing retailers, and the consumers. The product line length can be influenced by company objectives and resources. Our analysis affirms the need for product managers to incorporate the implications of distributed development in making their product line design decision.
The product line length within a company keeps changing. Product line depth refers to the number of versions offered of each product in the line. Sears will announce a special lowpriced washing machine to attract customers. It can be the quality of the product or even just the product design. If austin appliances eliminates a product line, total allocated fixed costs are assigned to the remaining product lines.
Product line design for a distribution channel marketing. Pdf a model for product line decisions researchgate. Product and pricing decisions in crowdfunding by ming hu, xi. This type of market stretch is observed when a brand is present in the middle or the upper premium markets but does not want to lose the lower level markets which might have a high level of consumption or which might pose a threat to the middle and upper level of market. This study investigates joint product line decisions by considering the dynamic substitutions of products as driven by the valuations that customers place on the products and the availability of each product type, which changes as consumers purchase a product. Stretching the product line the marketing study guide. A mathematical modeling approach to product line decisions glen. Distributed development and product line decisions ram bala. Basic concept a product can be defined as a collection of physical, service and symbolic attributes which yield satisfaction or benefits to a user or buyer.
Product line acquisition in a dod organizational guidance for decision makers march 2006 technical note john k. This dissertation introduces methods to quantitatively model the effects of human needs for social status on consumer behavior. Product line decisions are difficult because the products in the line are not usually independent. The product line manager typically selects one or a few items in the line to feature. Despite the importance of product line management as a competitive tool, empirical. Download promotional materials, such as brand campaign print ads, direct mail postcards, videos and counter cards. Companies sell multiple product lines under their various brands. Pdf abstract despite the importance of product line management as a competitive tool, empirical research addressing the determinants of. Product decisions revolve around decisions regarding the physical product size, style, specification, etc. Strategic issues the specialty personcare product category is dominated by one brand. Managing product line and product mix free download as powerpoint presentation. The report describes product line analysis in the context of product line development and shows how a requirements model is built based on object modeling, usecase modeling, and featuremodeling techniques.
A product line is too short if profits can be increased by adding items. The retailers problem is to jointly determine the set of variants to include in her product line assortment, together with their prices and inventory levels, so as to maximize her expected profit. Product line group of products that are closely related because. One of the decisions that they need to make when introducing new products to an existing product line is whether or not to stretch the length of their product line. The range of products offered by a firm is a critical strategic decision that will determine how the firm and their brands compete in the marketplace and the overall positioning of the brand. Productmix decisions are central to marketing strategy, and are a common feature of marketing simulation games. A product line is a group of related products under a single brand sold by the same company. Product line acquisition in a dod organizational guidance. The customers view of price as discussed in an earlier chapter, a customer can be either the ultimate user ofthe finished product or a business that purchases components ofthe finished.
Distributed development and product line decisions bala. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlet, or fall within given price ranges. Product management lesson 2 product line decisions and branding. Product is critical element of marketing mix anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need. Get an answer for please tell me the example of product line, product mix, product extension and product filling of the particular company. A successful product line organization considers its business to be the care, nurturing, and growth of its software product line.
The number of products in a product line refers to its depth, while the number of separate product lines owned by a company is the product line width. As a physical product, marketers need to consider packaging, labelling and branding involved in marketing the overall product. The marketing mix established for one product may effect. Normally a product line is managed by a group of persons one person product manager to manage product line. Fundamentals of decision theory university of washington.
Stretching the product line again if we use the apple example above, in the mobile phone market apple only offers smart phones of high quality. A product line is a group of related products produced by one manufacturer, for example, products that are intended to be used for similar purposes or to be sold in similar types of stores. Product mix decisions width, length, depth and consistency. Product mix a product mix is the set of all products and items that a particular seller offers for sale. Ch8 managing products, product lines, brands, packaging. Product decisions marketing mix describes how a business uses and manipulates the 4ps to market their product. A product line can contain one product or hundreds. Multiproduct pricing and product line decisions with status.
Researchers have found that reference groups shape consumer evaluations of these product categories. The final decision involved elimination of 14% of the companys products, which were contributing less than 4% of the companys volume and no profit. Ppt product decisions powerpoint presentation free to. An empirical analysis of firms product line decisions william p. The length of product line in distribution channels abstract this paper studies a manufacturers optimal decisions on extending its product line when the manufacturer sells through either a centralized channel or a decentralized channel. Pdf abstract despite the importance of product line management as a competitive tool, empirical research addressing the determinants of firm. In the face of stiff competition, best boards profits have declined steadily over the past few years. The remainder of this survey is structured as follows. The length of product line in distribution channels. In offering a product line, companies normally develop a basic platform and module that can be added to meet different customer requirements. Some luxury goods manufacturers ofier limited editions of their products while some others market multiple product lines. Corporate brand names are used when the companys name is powerful and can be used to help the product line. A case study in product line development with lisa brownsword. We modify the base model to include development capacity constraints as a driver of distributed development and find that the results are robust to this change.
This 2001 report provides a practical introduction to product line requirements modeling. Urban and others published a model for product line decisions find, read and cite all the research you need on researchgate. You can read this item using any of the following kobo apps and devices. Thus, taking the above example, if there are 4 product lines within the company, and 10 products within each product line, than the product line width is 4 only. A model for product line decisions ebook by glen l urban. Thus, product line width is a depiction of the number of product lines which a company has. In the overall product mix decision, a firm needs to consider product line. We show that a manufacturer may provide a longer product line for consumers in a decentralized channel than.
This paper studies the optimal product and pricing decisions in a crowdfunding mechanism by which a project between a creator and many buyers will be realized only if the total funds committed by the buyers reach a specified goal. Product line decisions open textbooks for hong kong. Product costs are determined in practice for the purpose of pricing, makebuy and product line decisions. Abstract despite the importance of product line management as a competitive tool, empirical research addressing the determinants of firm product line decisions is sparse. Sorry, we are unable to provide the full text but you may find it at the following locations. A companys product mix has the certain width, length, depth and consistency. One brand concentrates on one price brand but the larger brands have the deep pockets to start multiple product lines which can target multiple customer segments. It can be argued that product decisions are probably the most crucial as the product is the very epitome of marketing planning. New product development and consumer adoption process. Decisions on a product line level important and complex decisions are also made at the product line level, which tend to determine the length of a companys product mix. Each decision, 1 or 2, results in an outcome, or reward, for. Joint decisions on product line selection, purchasing, and. A major overthecounter drug manufacturer was interested in understanding the market implications of offering a new, higherstrength product to supplement their product line.
This 2006 report chronicles the decisions a program manager might face in considering the adoption of a product line approach. Pepsico product line delopment is closely relates to product mix because when product line is big then company product mix also developed. Jun 03, 2015 product management lesson 2 product line decisions and branding published on june 3, 2015 june 3, 2015 24 likes 0 comments. Fundamentals of decision theory chapter 16 mausam based on slides of someone from nps, maria fasli decision theory.
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