Product Mix Strategies with Examples / Product Assortment

Product Mix Strategies

Product mix, also known as product assortment, is the total number of product lines that a company offers to its customers. The product lines may range from one to many and the company may have many products under the same product line as well. All of these product lines when grouped together form the product mix of the company.

Product mix of a seller, while giving expression to its current position, is also an indicator of the future. Thus, product mix is not a static position but a highly dynamic concept.

A successful product mix strategy enables a company to focus efforts and resources on the products and product lines within its offerings that have the greatest potential for growth, market share, and revenue.

A company may withdraw a product from its existing mix, if the product is not contributing to the profitability and growth of the company. Similarly, a new product may also be added to the mix on some attractive opportunity that comes its way. Thus, the companies always attempt to maintain an optimal product mix with a view to maintain a balance between current profitability, and future growth and stability. For this end, a company alters or modifies the existing product line in any of the following ways:

1. Expansion

 It means addition to existing product line. Usually, an existing concern, with well-established market position can go for addition to existing product mix. Addition may be in a new product line or new product in the same line etc. It means increase the number of lines or the depth within the lines.

New lines may be related or unrelated to the present products. For example, Bajaj Company adds car (unrelated expansion) in its product mix or may add new varieties in two wheelers and three wheelers. When company finds it difficult to stand in market with existing product lines, it may decide to expand its product mix.


i. Hindustan Unilever Limited has various products in its product mix such as:

(a) Toilet soaps, detergent cakes, washing powders, etc.

(b) Cosmetic products,

(c) Edible items,

(d) Shaving creams and blades,

(e) Pesticides, etc.

If company adds soft drink as a new product line, it is the example of expansion of product mix.

ii. A company dealing in drugs and chemicals may add products in a relatively new area like Computers.

2. Contraction

When a company eliminates some product lines or individual products that are not profitable enough it is called contraction. In this case, a company decides to focus only on the most profitable models or lines. Here, fat product lines are made thin. Some models or varieties, which are not profitable, are eliminated. This strategy results into more profits from fewer products.


If Hindustan Unilever Limited decides to eliminate particular brand of toilet shop from the toilet shop product line, it is example of contraction.

3. Alteration of existing products

When a company improves existing products in terms of features, qualities, or performance instead of developing new ones is called alteration of existing products. Usually, the existing product is reshaped and introduced in market. The products colour, design, shape, size, etc., are changed and marketed. A slight modification would bring back the product in the market. This strategy is less risky compared to creating a new product from scratch.


i. For material goods, especially, redesigning is often the key to products, and renaissance packaging has been a very popular area for product alteration, particularly in consumer goods.

ii. Maruti Udyog Limited decides to improve fuel efficiency of existing models. Modification is in forms of improvement of qualities or features or both.

4. Product differentiation and Market Segmentation

Product differentiation

It is when a company starts positioning a product as a superior choice to competition without making alterations to its features, qualities, or price. In this case, a company relies on effective salesmanship, aggressive advertising campaigns and clever promotion techniques to convince its target audience that their product offers better performance or higher quality.


Apple differentiates its products by pricing them higher than its competitors implying that the products are better quality and incorporate the latest technology.

Market Segmentation

This strategy is used where the total market is made of many smaller homogeneous units, each of which of its units has different wants, motivation etc. To meet these different demands, different products are developed to make tailor-made products to suit these requirements. A company that sells luxury cars might look for customers with a certain income, age, or job. For example, they might make ads for older, wealthy people who are likely to be interested in luxury cars.

5. Trading up and Trading down

Trading Up

When we add a higher priced prestige product to the existing low-priced product line, it is termed as trading up. This strategy is adopted with the hope of increasing the sales volume of the existing low-priced , products. For example, when a software product launches a ‘Pro’ alternative.

Trading Down

It is the reverse of trading up. When a firm adds low quality products at relatively lower price to its line of high priced prestige products, it is termed as trading down strategy. It helps in widening the marketing base and results in expanding overall sales volume. For example, many publishers add a paperback edition of books they have produced in hard cover.

Product Mix Strategies with Examples / Product Assortment

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