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Product Mix Modifications

A company’s product mix is never static. Customer’s preferences change, new customer segments emerge, and company’s competencies and priorities change. All these changes warrant a change in a company’s product mix.

Product Mix Expansion

Product mix expansion is achieved by increasing the depth within a particular product line i.e. new brands or variants of existing brands are added to the product line and/or by increasing the number of product lines.

Line Extension

When a company adds a similar item to an existing product line with the same brand name, it is called line extension. A company resorts to line extension to appeal to more market segments by offering a wide range of options of flavors, color, size, etc. for a particular product.

Category Extension

New product lines are added to the company’s present assortment. The new lines may be related or unrelated to the current products. The company may use one of the existing brand names or may give an entirely new name to the new product lines. When a company uses one of its existing brands to offer a new product line, it is called brand extension.

See also  Positioning, Differentiation and Marketing Mix

Trading Up

A company adds a higher priced product to a product line to add prestige to the line and attract a broader market. The company hopes that the new product’s prestige will help the sale of lower priced products. But this has proved to be onerous task for companies. If the existing brand name is used for the new high priced product, the company must change its image enough so that new customers will accept the higher priced product.

The company does not want to lose present customers who will be increasingly confused about the company’s image. But the company may lose existing customers who will believe that the company’s offers are no more economical. The new customers may not be convinced about the premiumness of the new product because of the company’s long-time association with low priced products. If the company uses a different brand name for its new higher priced product, it will have to spend enormous resources in branding it.

Trading Down

A company adds a lower priced product to its product line. The company wants to attract customers who cannot afford the original higher priced products or who find the current products too expensive. This strategy does attract buyers because the lower priced product carries some of the status and some of the benefits of the higher priced product.

See also  Stages of Product Life Cycle

But the company will face a problem if the customers of the higher priced products shift to buying lower priced ones. The new low priced products may also damage the company’s reputation and image of its established high quality products. To control such a damage the new low priced products may be given new brand names.

Product Mix Contraction

Product mix contraction is achieved either by eliminating an entire product line or eliminating a few product items or brands from within a line. The idea is to weed out low-profit and unprofitable product items or product lines and earn higher profits from fewer products.


Repositioning involves changing customers’ perceptions of a brand. It involves changing the product’s attributes and communication to the customers.

Product Modification

Product modification will involve changing the quality levels of the product item to make it more appropriate for the target market, functional modifications to reflect changing customer requirements and to incorporate latest technologies, and style modification to appeal to customers’ emerging aesthetic concerns.

Planned Obsolescence

This is the practice of modifying products so that those that have already been sold become obsolete before the need for replacing them actually arises. The modified product is substantially different and better than the earlier versions, and customers who possess the earlier versions feel disadvantaged or unfashionable.

About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.