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Product-Mix Strategies: Sommers Barnes
Product-Mix Strategies: Sommers Barnes
Sommers
Barnes
Chapter Goals
To gain an understanding of: The difference between product mix and product line Major product-mix strategies: Positioning, expansion, alteration, contraction, trading up and trading down Managing a product throughout the Product Life Cycle Planned obsolescence Style and fashion The fashion-adoption process
10 - 2 Copyright 2001 McGraw-Hill Ryerson Limited
Breadth - the number of product lines carried. Depth - the variety of sizes, colours, and models offered within each product line.
10 - 3 Copyright 2001 McGraw-Hill Ryerson Limited
BREADTH (DIFFERENT LINES) Lawn mowers Gardening tools Lawn furniture Power rotary Power reel Rakes Hoes Shovels Chairs Chaise lounges Benches
Hand-powered
Various sizes and prices in redwood or Each in various Each in various aluminium with sizes and prices sizes and prices plastic webbing
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Same brand, related product (Tim Horton coffeemaker) Same brand, unrelated product (Swiss Army watch) Different brand, unrelated product (Pepsi & KFC) Different brand, related product (P&G adds Luvs diapers; already makes Pampers)
10 - 6 Copyright 2001 McGraw-Hill Ryerson Limited
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Product-Mix Contraction:
Eliminate an entire line or reduce assortment within it. Pruning to reduce similar brands. Dump unprofitable or indistinct brands.
Copyright 2001 McGraw-Hill Ryerson Limited
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Profit 0 Loss
Time in years
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Time in years
Aggregate sales
Time in years
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Fashion-Adoption Process
Series of buying waves as a given style is popularly accepted by one group after another. Three theories of fashion adoption: Trickle-downa given fashion flows Trickle-down down through several socioeconomic levels. Trickle-acrossthe fashion moves Trickle-across horizontally and simultaneously within several socioeconomic levels. Trickle-upa style first becomes Trickle-up popular at lower levels and then flows upward.
10 - 17 Copyright 2001 McGraw-Hill Ryerson Limited
TRICKLE-ACROSS
TRICKLEUP
Product adopted first by lower socioeconomic group
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TRICKLEDOWN
TRICKLE-ACROSS
Discount stores