Product portfolio strategies from the experts
Effective Product Line Strategies
There are several factors to keep in mind when choosing a product mix strategy. The first and most important factor is market saturation. The strategy of broad specialization gives the maximum effect in conditions of scarcity. In such conditions, people are snapping up everything like hot cakes, which means that in order to make maximum sales, you need to have a variety of goods.
If there is no shortage, then people are very picky, they ask a lot of questions, and in order to sell a product, you need to know a qualitative answer to each of them. If there is a very large assortment, then it will hardly be possible to answer all questions qualitatively. If you give the buyer a low-quality answer, then he most likely will not make a purchase and will go looking for a place where he will be given a high-quality answer to the question.
The second factor in choosing a product line strategy is the store format. If you open a hypermarket, then this already implies a wide assortment, because people come to the hypermarket precisely in order to buy everything and more. According to this factor, a priority hypermarket is selected, which will be visited most often. If we are not talking about a hypermarket, then a wide assortment will more likely harm than help.
The third factor in choosing a product line strategy is the location of the store in relation to where customers live.
People will be overloaded with information, they will have a conflict of motivation and it will be difficult for them to choose something to buy. For ordinary stores, it is advisable to focus on a narrow assortment and have a product line that covers the entire range of needs of a particular type.
The third factor in choosing a product line strategy is the location of the store in relation to where customers live. You need to understand what your target audience will be. If these are people from nearby houses, then they will most likely come to you for goods of impulsive demand, i.e. for items that are not planned to be purchased in advance.
Accordingly, it is necessary to have as wide a range of such goods as possible, and here a wide assortment strategy is applied. If your target audience is people who are ready to go to you specifically for something, then exactly why they go to you and you should have, and this, as a rule, is a rather narrow range of goods, so a narrow assortment strategy is applied here.
As you can see, the choice of product assortment strategy depends on a large number of factors.
As you can see, the choice of product assortment strategy depends on a large number of factors. Some of them are described above, but these are not all factors. In fact, there are a lot of factors. Therefore, to choose the most effective strategy, you need to conduct a situational analysis. It will help to carry out the effective formation of the product range.
Situational analysis involves making a list of all possible factors and analyzing them both separately and in relation to each other. Doing all this is, let’s say, an amateur. Some people love to do it and some don’t. But this must be done, because the future of the store is at stake, and therefore your future.