The set of goods and services a company provides. Generally speaking, a company offering a wider product mix carries less risk but also usually has a lower profit margin. That is, the profit margin for a company like Wal-Mart may not be high, but so long as most of its products have strong sales, it is in no danger of bankruptcy. On the other hand, a company may only offer a few products; this is high risk because there may be low demand for the products, but specializing in a niche market can result in exceptionally large profits.
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The composition of goods and services produced and/or sold by a firm. A limited product mix tends to increase the firm's risk at the same time it increases the potential for large profits. Thus, a firm specializing in a niche market in electronics is likely to experience great success or large losses depending on how demand and competition develop for its specialized output. Also called sales mix.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
product mixsee PRODUCT RANGE.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
product mixthe mixture of PRODUCTS offered by a FIRM. Since most products tend to follow a typical PRODUCT LIFE CYCLE, it is expedient for companies to maintain an appropriate mix of newly launched products, growth products and mature lines. In addition, the firm may choose to offer a range of similar products to appeal to different sectors of the market as part of a MARKET-SEGMENTATION strategy. A firm will generally consider its product mix in the context of its broader MARKETING (embracing price, advertising, etc.). See also PRODUCT MARKET MATRIX.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005