Product Mix – Meaning, Dimensions, Importance and More

Product Mix, product assortment, or product portfolio is the categories of products that a firm offers. In other words, the product mix is the number of product lines a firm has under its umbrella. Moreover, this concept belongs to the Marketing stream. There could be one or more products under a product line. All the product lines together constitute a product mix.

For example, Coca-Cola deals in soft drinks, juices, and more. These are its product lines. A product line includes similar items that a company makes or the products that a consumer uses together. A company, however, may have separate product lines.

Dimensions of Product Mix

Aspects of product mix help to define the number of product categories and the number of items that a company offers. And it has four dimensions:


The number of product lines that a firm has suggested is what is called the width of a product mix. For example, If Coca-Cola sells only juices and soft drinks, it means it has two product lines. And, if it also sells mineral water, it would mean it has three product lines.


The length refers to the products in a product mix. For instance, if a company has 4 product lines, and under each product line, it has four products each, then the length of the company’s product is 16.


It is the total number of variations of a product in a product line. The differences can be in the form of size, flavor, or any other product characteristic. For example, Colgate, in its toothpaste product line, sells different flavors of toothpaste, such as Colgate advanced, Colgate active salt, and more. Moreover, if it sells in various sizes, that will also count as depth. Suppose Colgate sells toothpaste in three sizes and two flavors; it would mean a depth of six.


It means the relationship between the products in a product mix. The relation is mainly about the production and distribution channels. More consistency is advantageous for a company as it would mean lower costs and better distribution. Moreover, more compatibility also means brand image aligning with the products that a company makes. Nestle, for example, has more consistency in its product line.

Product Mix Example

Let us take an example to understand all four dimensions better.

For simplicity, let’s assume that Coca-Cola deals in only two product lines – soft drinks and juice. Under soft drinks, the company owns brands like Fanta, Sprite, and Diet Coke. Under the juices, it offers three flavors Guava, Orange, and Mango. Assume the company sells soft drinks and juice in only one size.

In this case, the consistency is very high as all the products come under the beverage category. Therefore, the production and distribution channels will be similar for all the products.

Talking of other dimensions, the width will be two as the company has two product lines in our example. The length, in our case, will be six. It is because, under soft drinks and juices, it has three products each. Similarly, the depth, in this case, will be three products for each product line, i.e., soft drinks and juice.

Factors Affecting Product Mix

Primarily four factors affect the product mix:


A new company would have fewer products in its lineup. On the other hand, an older company is likely to produce more products.

Product Mix

Financial Position

A company that is doing well and has good financial standing is likely to have more products in the product mix than a company that is not doing well financially. A company not doing well would slash its product line or products.

Area of Operation

If a company is in an industry where it can afford more products or making more products is feasible, then it should do so. For example, there is more scope of innovation in the smartphone industry than in the chip industry.

Brand Identity

Sometimes a brand becomes so big that it can easily add new (related and unrelated) product lines or items. For instance, there were rumors of Apple coming up with a car.


Understanding the product mix of a company is essential to studying and analyzing its brand image. A company with more product width and depth is seen as more diversified. More diversification means less risk as the company lowers its dependence on one product or product line.

Usually, if a company expands the product width, it gives it the ability to diversify risk and meet different consumer demands. On the other hand, if a company expands in-depth, it allows it to meet the needs of the present customers better.

However, if a company adds unnecessary products to its product line, then it could hurt its bottom line, as well as brand image.

Product Mix Strategy

As said above, a new company starts with fewer products but tries to achieve a higher level of consistency. As it moves along or as it grows, it makes efforts to enter new markets, come up with new products, and offer unique products. Additionally, they try to come up with products of superior or lower quality to provide more choices to the customers.

Such a strategy means stretching the product line. Coming up with a superior quality product is upward stretching, and introducing lower price items is downward stretching.

Final Words

If a company can manage its product mix successfully, then it would be easier for it to adjust to the altered demand pattern and preferences. Moreover, it diversifies the risks and lowers the dependence on one product or one product line. But, it must be careful when expanding the product mix. It should not add unnecessary items and carry out thorough research to make sure there is a market for its items.

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

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