A company’s pricing decisions are affected by many internal company factors and external environmental factors. Internal factors include the company’s marketing objectives, marketing mix strategy, costs, and organisation.
These four dimensions of the product mix provide the handles for defining the company’s product strategy. The company can increase its business in four ways.
Product Assortment (also called product mix) is the set of all product lines and items that a particular seller offers for sale. An organisation with several product lines has a product mix. A company’s product mix can be described as having a certain breadth, length, depth, and consistency.
We now look at decisions relating to the development and marketing of individual products — the actual product. Developing a product involves defining the benefits that the product will offer.
In seeking marketing strategies for individual products, marketers have developed several product classification schemes based on product characteristics.
A tennis racquet, a haircut, a Broadway play, a Hawaiian vacation, and a telephone answering service are all products. We define the word «product» as follows: «A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.»
The E company has no clear strategy. It can be strong in some areas, however, not due to the implementation of one of the mentioned four basic competition strategies. The company has more or less chosen to spread over the four strategies.
The D company has chosen the two following strategies: To obtain differentiation of its product by identifying special needs which the customer consider useful and valuable and integrating the corresponding characteristics in the product/services
The C company has chosen the two following strategies: To obtain differentiation of its products — differentiate it from the products of the competitors by covering special needs which the customers considers useful and valuable and integrating the corresponding characteristics in the product/services
The B company has chosen the following two strategies: To obtain cost dominance, i.e. the company which has the lowest production costs in the trade.
