What Is Product Mix Problem?

What are the product mix pricing strategies?

Five product mix pricing situationsProduct line pricing – the products in the product line.Optional product pricing – optional or accessory products.Captive product pricing – complementary products.By-product pricing – by-products.Product bundle pricing – several products..

What is the difference between product line and product mix?

Product Mix. Both manufacturers and retailers must decide on width and depth of a product mix. This is done with strategies that determine a target market and an image. A product line is a group of closely related products manufactured and/or sold by a business.

Why product is the most important in marketing mix?

The product is the most important element of the marketing mix. Developing a total marketing programme involve the marketing manager arming himself with the 4p’s of the marketing mix, i.e. product, place (distribution), pricing, and promotion. … The aim of the product is to satisfy the need and desire of the customer.

What is product mix and examples?

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.

How do you determine the 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. Profit margin per unit (in dollars, not percentage)

What is product mix in accounting?

In cost accounting, product mix refers to the mix of products you produce. Sales mix refers to the mix of products you sell. They are broadly related. Every company deals with limited capacity, so smart decisions about product mix can greatly increase your profit.

What is optimal product mix?

Product mix refers to the variety of products a business offers its customers. … An optimal mix maximizes the potential unit sales while maintaining — or ideally improving — the company’s profitability.

How do I Maximise my contributions?

Assuming an inverse relationship between price and sales volume, as is the case for most products since a lower price will generally induce higher unit sales, the firm would assume likely unit sales levels at various price levels, calculate the contribution margin per unit for the product at each of those price levels, …

What is product mix optimization?

Product mix problems are conceptually the easiest constrained optimization problems to comprehend. … The objective is to find how much to produce of each product (i.e., the mix) to maximize profits subject to not using more of each resource than is available.

What are four reasons for expanding a product line?

There are many reasons to expand a product line, most notably to grow your revenues and market share.What Is Product Expansion? There are several types of product line expansion: … Boosts Market Share. … Increases Customer Loyalty. … Minimizes Risk.

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.

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 are the product mix decisions?

These are: width, length, depth, and consistency. The first of the product mix decisions refers to the product mix width. The width is all about the number of different product lines the company carries. … A car manufacturer may have several series in its car product line, such as 3-series, 5-series, and 7-series.