What Are The Five Product Mix Pricing Situations?

What is product mix strategy?

The product mix consists of all product lines and individual products marketed by a firm.

Most firms market multiple product lines with many products in each line.

However, sometimes companies can be very successful by having a limited product mix..

What is product length and width?

3. Width : Number of different product lines carries by the company. Length : Total Number of items in the product line. Depth : Number of version offered of each product in the line. Consistency : Closely related the various product lines.

Which pricing strategy is best?

Pricing Strategies ExamplesPrice Maximization. A price maximization strategy aims to make pricing decisions that generate the greatest revenue for the company. … Market Penetration. … Price Skimming. … Economy Pricing. … Psychological Pricing.

What is Product Strategy example?

Examples of product initiatives include: Improve customer satisfaction. Increase lifetime customer value. Upsell new services.

What is product life cycle and its stages?

The term product life cycle refers to the length of time a product is introduced to consumers into the market until it’s removed from the shelves. The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline.

What are the strategies of product life cycle?

The product life cycle contains four distinct stages: introduction, growth, maturity and decline. Each stage is associated with changes in the product’s marketing position.

What is product mix pricing?

The product mix is the collection of products and services that a company chooses to offer its market. Pricing strategies range from being the cost leader to being a high-value, luxury option for consumers.

What are the 3 product mix strategies?

The major alternative product mix strategies (given by William Stanton and others) have been discussed briefly as under:Expansion of Product Mix: … Contraction of Product Mix: … Deepening Product Mix Depth: … Alteration or Changes in Existing Products: … Developing New Uses of Existing Products: … Trading Up: … Trading Down:More items…

Why is product mix important?

Your product mix is important in determining the image of your business and brand, as it helps you to maintain consistency in the eyes of your target market. For instance, if you’re a discount retailer, your target market likely consists of economy-minded shoppers looking for low prices.

What is the difference between product mix and product line?

A product mix is a group of everything a company sells. However, the product line is a subset of the product mix. A product line refers to a unique product category or product brand a company offers. For example, Patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc.

What is a good pricing strategy?

Good pricing strategy helps you determine the price point at which you can maximise profits on sales of your products or services. … While customers won’t purchase goods that are priced too high, your company won’t succeed if it profit margins are too low to cover costs.

What is an example of a product mix?

Product mix, also known as product assortment, refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products. … Or your product lines may be vastly different, such as diapers and razors.

What are four types of pricing strategies?

Apart from the four basic pricing strategies — premium, skimming, economy or value and penetration — there can be several other variations on these. A product is the item offered for sale. A product can be a service or an item. It can be physical or in virtual or cyber form.

What are three kinds of pricing methods?

In this short guide we approach the three major and most common pricing strategies: Cost-Based Pricing. Value-Based Pricing. Competition-Based Pricing.

What is Nike’s product mix?

Nike Inc.’s Marketing Mix (4Ps/Product, Place, Promotion, Price) – An Analysis. Nike Inc.’s marketing mix (4Ps) determines the profitability and growth of the athletic footwear, apparel, and equipment business.

How do you calculate product mix?

Actual sales mix percentage: the number of actual units sold of a product divided by total units sold of all products. Budgeted sales mix percentage: the number of budgeted units sold of a product divided by budgeted total units sold of all products.

How companies find a set of prices that maximize the profit from the total product mix?

How companies find a set of prices that maximizes the profits from the total product mix. strategy sets high initial prices to “skim” revenue layers from the market. … takes into account the cost differences between products in the line, customer evaluations of their features, and competitors’ prices.

What are some risks of adding a new product?

Risks Associated with Product DevelopmentRisk of major delays and economic costs due to belief that high utilization of resources improves performance. … Increasing costs as a result of processing work in large batches. … Risk of losing opportunities by “sticking” to a single development plan. … Risk of starting a product development task too soon.More items…