Choosing the best mix of products, satisfying and help to retain the customer, the competition is a factor that contributes to the success of the business. However, offer a wide range of products requires a good financial planning and logistics.
Classification of products
The mix is composed of families or subfamilies of products that seek to respond to a need for more comprehensive and identical consumers. Your rating considers the convenience / comfort, as follows:
- Products purchased frequently: those who bring little added value and the price is generally low. As products of basic necessity, generate continuing demand, and the consumer does not lose much time in the selection or comparison. Examples are bread, sugar, salt and oil;
- Products of purchase compared: those that lead the consumer to compare prices, quality, style and other features before deciding to purchase. Are generally more expensive and bought less frequently, such as clothing, appliances, furniture and audio equipment;
- Products of expertise: general articles of famous brands, the possible replacement is unacceptable by the customer. Have unique or differentiated. Consumers know and do not compare;
- News: are the items that produce high levels of sales, so intensive and fast for a short period of time, which usually corresponds to the release;
- Products of fashion: follow trends influenced by opinion formers (one stylist, a novel etc.).. Your sales can alter dramatically from one season to another;
- Seasonal Products: are those whose sales fluctuate dramatically during the year. For example, BODY CREAMS and sorbets in summer, gas for heating in winter.
Dimensions of the mix
The variety of products depends on the nature of the business, its limitations and its goals. The size of the mix of products is defined based on the following factors:
- Range or scope: measures the number of families of products offered by point of sale and, consequently, the number of needs met;
- Depth: measures the number of references provided by the point of sale in each family of products;
- Consistency: is the homogeneity of the mix, the correlation between the needs of consumers and the products selected to satisfy them. It also says that a mix is consistent when all the families of products have substantially the same depth.
The mix can also take the following dimensions:
- Wide and deep: with a variety of categories / families of products and a wide range of references by category / family. This type of mix is typical of large areas of sales (supermarkets or magazines);
- Broad and deep low: medium available in supermarkets or small, offers several categories of products such as detergents, food and office, but with little variety in each family / subfamily;
- Narrow and deep: mostly found in shops specializing in one category of products such as electronics stores, toys etc..;
- Close and little deep: characteristic of convenience stores.
Selecting the mix
The selection of products that will be part of the mix depends on the desired position. When you select the mix, the trader runs the risk, often to satisfy a sector of the clientele at the expense of others. Therefore, any change in trade policy affect the store. The mix of the store can be:
- Diverse or restricted according to the number of sections or families of products;
- Considerable or scarce, depending on the number of models of a given family;
- Deep or superficial, as the choice of references for each article or need to be met.
Determining the most appropriate mix of products takes into account the costs of provision, financing, storage, breakage and depreciation. The creation of the policy mix can be:
- Concentrated: consists of a family of products only, very often used in specialized stores;
- Difference: consists of several groups of families of products, leading to a general store and diverse, but without much depth.
The creation of the plan requires the detailed mix of product types that will be offered during a given period of time. They must all be related to products, divided into families and with their prices. The basic products of interest should be given particular attention, as influencing the purchase of others and have great importance in global sales.
The plan should consider, even if the availability of each article will be annual, semiannual, weekly or daily. For categories of products in constant demand, the initial plan may be adjusted or corrected by means of occasional revisions. To the families of seasonal products, you can draw up special plans or temporary.
Correct sizing
For the correct sizing of the mix is necessary to consider the area of exposure for sale, which is fixed measures that limit the number of products that can be displayed. An increase in the width of the mix always requires a reduction of its depth and vice versa. Other aspects to be considered are:
- The profitability: the higher the number of families and references within each family, will slow the rotation of stock and the lower the returns generated. To compensate for this inconvenience, the point of sale should increase the sales price, but this practice is not always feasible, we must find the balance with more selection and less competitive prices or less and offers lower prices;
- The nature of the products: shops with similar areas must have different sizes of mix. For example, a store of electrical products will have a size of less than a store of food;
- The behavior of customers: the sociological characteristics and purchasing power of customers affect the size and condition of the mix, particularly its depth.
The mode of presentation of products on shelves and gondolas, and its dimensions may vary with the number and capacity, so that the presentation of products is made ever so correct.
- A range: the relationship between the mix and the range has varied over the years. In the 50s, there was a pyramid scheme that precluded a high range and low range to a low and wide. In the 70s, there was a pattern of diamond-shaped extension of the ranges and averages in the 90 range the average fell, extending the high and low ranges.
- Internal factors: size of the board as sales, financial policy, the inventory and brand strategy;
- External factors: such as the types of products and the life cycle of them.
To match the offer from the store with the customer demand, and thus achieve a balance and profitability of the store, the administrator should consider the following:
- The demand for each product within each family or subfamily. Each reference should be classified according to their sales volume. If two references are responsible for 80% of sales and three by 95%, eliminating a fourth reference may be the best option, replacing it with another potentially more interesting, or extending the space of three others;
- The influence of each product on the sale of others. Certain positive influence on the sale of other products and are known to attract. Even if a product is unprofitable, its maintenance in the mix could help sales of others;
Introduction of a new product in the mix
The decision to introduce a new product in the mix is one of the most complex and difficult, since the entry into a product line may require the withdrawal of another. To determine if a new product should be introduced in the mix, consider:
- The business reputation of the manufacturer;
- Your purchase price compared to competitors;
- The image quality of the mark in relation to competitors;
- The contribution of the product gross margin for the family;
- The market potential of the product;
- The amount of investment for its launch;
- The added value that it proposes to the consumer;
- Your assessment in tactical horizontal to promote competition between suppliers.