Skip to content
Strategic Product Mix: The Foundation of Sustainable Marketplace Growth and Resilience

Strategic Product Mix: The Foundation of Sustainable Marketplace Growth and Resilience

In today’s fast-paced and highly competitive business landscape, having the right product mix is more important than ever for driving growth and building long-term resilience. The product mix refers to the total breadth and depth of products a company offers to meet market demand. It encompasses the variety of products, the number of SKUs, and the quantity produced for each item.

Having a strategic, well-planned product mix lays the groundwork for success by aligning supply with demand. It ensures you are offering the right products in the right quantities to target customers. Furthermore, a balanced product mix creates a solid foundation for responding to market changes and new opportunities.

In this blog post, we will explore how a strategic product mix establishes sustainable growth and resilience in the marketplace. We will look at key principles for developing a strong product mix and examine the risks of having an imbalanced assortment. With the right product portfolio, you can drive profits, differentiate from competitors, and adapt to evolving consumer preferences.

Defining the Strategic Product Mix

The product mix refers to the complete set of products and items a company offers for sale. It is composed of:

  • Product width – the number of different product lines/categories
  • Product depth – the total number of items in each product line
  • Product consistency – how closely products are related to each other

A strategic product mix strikes the right balance across these elements to align with consumer demand, achieve production efficiencies, and support business objectives. It should include a diverse range of products to appeal to different customer segments and needs. Popular, high-selling items help drive profits, while new and innovative offerings allow you to differentiate in the market.

The ideal product mix has enough variety and options to provide value to consumers, without being so vast that it leads to inefficiencies. Determining the optimal product assortment and quantities to manufacture requires analyzing historical sales data, understanding consumer behavior, and identifying emerging trends. With the right mix, companies can maximize sales and profitability while efficiently utilizing production and inventory resources.

Principles for Developing a Strategic Product Mix

Constructing a strong, strategic product mix rests on several key principles:

  1. Align with Company Goals and Target Market

A company’s product portfolio should directly map to its overall mission, objectives, and growth strategy. Offerings should appeal to your defined target customer base and satisfy needs better than competitors’ products. Always view product mix decisions through the lens of your positioning and goals.

  1. Balance Breadth and Depth

Seek diversity in your product assortment to serve differing customer segments, while also having selectivity and focus. Do not overextend your product lines too thin or too deep. Find the right equilibrium based on resources, capabilities, and demand. Research shows that companies with the highest product variety grew revenue 5% faster over 5 years compared to companies with lower variety (McKinsey, 2021). However, 67% of retailers struggle with managing large SKU counts (Optoro).

  1. Adapt to Changes in Consumer Behavior

Regularly analyze sales patterns, market trends, and consumer preferences to identify changes. Add new products or features to align with demand shifts. Phase out stagnant, declining items to maximize manufacturing and shelf space. Studies show companies shifting their product mix toward in-demand items grew 2-3% faster than their peers (McKinsey).

  1. Support Brand Identity & Price Point

Introduce products consistent with your brand promise and positioning. Offer items across multiple price tiers to meet varying budgets. Prevent brand dilution by avoiding products outside your image. Surveys indicate 61% of consumers want options at different price points when shopping (Forrester, 2021).

  1. Leverage Economies of Scale

Identify ways to maximize efficiency across products, such as shared platforms/components. Balance high-volume products and niche items, leveraging large production runs where possible. Optimizing product mix can increase production efficiency by over 17% (Industrial Manufacturer Example).

  1. Mitigate Risk Through Diversification

Have a diverse mix as a hedge against shifting demand and economic cycles. If one segment declines, growth in other areas can offset. Diversification also caters to multiple consumer groups. Data shows diversified product portfolios have about 15% lower margin variability over time (BCG).

Avoiding an Imbalanced Product Mix

While a strategic product portfolio lays the foundation for success, an imbalanced assortment can undermine it. Common issues to avoid include:

  • Too much variety – excessive SKUs lead to excess inventory, higher costs.
  • Too little variety – not enough choice for customers to find appealing options.
  • Mismatch with demand – manufacturing items consumers do not want.
  • Cannibalization across products – similar items competing for the same sales.
  • Low economies of scale – lacking production optimization for volume items.
  • Excess niche products – unique items difficult to sell in large quantities.
  • Copycat products – mimicking competitors rather than innovating.
  • Poor consistency – offerings misaligned with brand identity or target audience.
  • Failure to adapt – retaining outdated products not in line with trends.

The consequences of an imbalanced product mix include lost sales from missing key product segments, excess inventory leading to mark downs and waste, and inefficient production. Positioning yourself for success requires regularly reevaluating your portfolio and making strategic adjustments.

Driving Sustainable Marketplace Growth

A thoughtfully constructed, strategic product mix lays the foundation for driving sustainable marketplace growth in several key ways:

  • Meet range of customer needs – variety and options for diverse groups of consumers.
  • Appeal to multiple segments – product depth caters to niche segments.
  • Capture more market share – portfolio aligned with consumer demand.
  • Increase sales of existing items – fill gaps in assortment.
  • Drive trial and repeat purchase – compelling new items attract first purchases.
  • Respond to competitive threats – close product gaps relative to rivals.
  • Leverage economies of scale – optimize production volumes.
  • Lower costs through shared efficiencies – common components/materials across products.

Making regular adjustments to align with demand trends and introduce new products for emerging consumer needs ensures your mix captures optimal share in the marketplace.

Building Long-Term Resilience

In addition to enabling growth, a strategic product mix establishes resilience by:

  • Providing a diverse revenue mix – range of products balances risk. If one segment declines, others can compensate.
  • Hedging against economic cycles – variety of price points and good-better-best items weather recessions.
  • Adapting to changes in consumer behavior – new products match evolving preferences.
  • Responding to competitive threats – plugging portfolio gaps maintains share.
  • Leveraging core strengths across offerings – new items build on existing competencies.
  • Avoiding overreliance on singular products – declining items phase out gracefully.
  • Optimizing inventory and production – scale efficiencies minimize waste.

By taking a portfolio approach, companies can withstand market volatility, competitive pressures, and macroeconomic cycles.


A company’s product mix serves as the core foundation for achieving growth and building resilience in the marketplace. Constructing an optimal portfolio requires balancing breadth and depth across aligned, relevant products. Regular tuning based on market insights ensures offerings keep pace with consumer demand. With a diverse, strategically managed product range, companies can drive profits, differentiate from the competition, and adapt to market changes. A well-planned product mix establishes the agility and flexibility to sustain marketplace leadership over the long-term.

Redefining Marketplace Efficiency: The Power of Automation