PRODUCT POLICY

Day 2
Product Policy
Important product decisions to be made by a firm:
■ Decide on the types of products or services a firm will sell.
■ How many product lines it will develop, and how many
different items it will offer within each line.
■ Over time, it must revisit these decisions and adapt the
line through addition, deletion, or modification of products
for sale.
■ Product Mix or Product Portfolio consists of all the
product lines and items that a firm offers for sale.
■ Product line A group of products or services marketed
and positioned by an organization to one general
market. The products have some characteristics,
customers, or uses in common, and they may also share
technologies, distribution channels, price, services and
so on.
■ Consistency of Product Mix Refers to how closely related
the various product lines are in end use, production
requirements, distribution channels, etc.
■ Product mix width The number of the product or service lines
(categories) that a company offers to its customers
■ Product line depth The number of product varieties
(subcategories) within a product or service line or category.
Product line depth decisions are driven by how many
different segments within the target market the firm chooses
to serve.
■ Stock-keeping unit (SKU) A specific unit of inventory that is
carried as a separate, identifiable unit. In retailing it is the
lowest level of identification of merchandise.
■ Illustrative examples:

#1: www.marriot.com
#2: www.apple.com