Impact of product line mix strategy to improve sales: Case of Jaygee Proposal

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Updated: Jan 19th, 2024

Abstract

Jaygee Incorporation is currently experiencing a problem in generating sales revenue. The problem is due to the poor product mix strategy that the firm has adopted. This proposal entails an evaluation of how Jaygee can integrate product line mix strategy in order to improve its sales revenue.

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A comprehensive literature review is conducted to illustrate the relevance of the subject under investigation. The review aims at establishing the links between the study and previous studies on the subject matter. Qualitative research design has been employed in the process of conducting the study. The method of data collection and analysis together with the sample population to be used in the study are clearly illustrated.

The researcher appreciates the importance of human factors in conducting the study. Consequently, a number of ethics to be observed in the process of conducting the study are clearly illustrated.

The various activities to be undertaken to complete the study successfully are outlined. The expected timeframe within which the specific activities should be completed is illustrated. The resources necessary to conduct the study are identified and explained.

Introduction

Jaygee is a retail franchise company charged with the responsibility of distributing product for different companies in South East Asia. In 1964, Jaygee signed a distribution contract with Levi-Strauss & Company. In the course of its operation, Jaygee has managed to establish an extensive distribution network in different South East Asian countries.

The store carries diverse product categories for both genders which include bottoms such as jeans, shorts and tops such as t-shirts and jackets. Accessories such as wallets, socks, bags, and belts also compose a part of stores product categories. In total, the store carries 19 product lines with each product line being characterized by a unique price position, brand attribute and fashion image.

A study conducted by the firm’s managers cited high turnover of sales personnel, poor awareness, and an ineffective product mix to be amongst some of the reasons for poor sales revenue performance. Jaygee’s management team should research on the product-line mix strategy it should adopt in its repositioning efforts.

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Conceptual underpinnings of the study

The study is guided by the concept of product life cycle, which is composed of four stages, viz. introduction, growth, maturity, and decline.

Product Life Cycle.
Figure 1: Product Life Cycle.

The high level of dynamism being experienced in the market today requires marketing managers to track market demand effectively. This aspect will inform the managers on the most effective product proliferation strategy to adopt. Some of the product decisions that marketing managers may consider relate to product styling, quality and functionality amongst others.

According to Shankar (2006), firms are more likely to invest in product line action if the intensity of competition is high. Second, product line action is also considered if competitors have heavily invested in product line development.

Earlier studies conducted on the same indicate that product development forms part of the most critical element used by different companies in disparate economic sectors in ensuring that they achieve a certain degree of competitiveness. Currently, the concept of product proliferation is evidenced by numerous product introductions by firms.

This study is guided by the concept of product lifecycle. Decision to incorporate product life cycle has been motivated by the need to highlight the importance of Jaygee investing in product line development. By integrating this conceptual framework, the firm will be able to decide on the most effective way to improve sales of a particular brand in order to enhance its competitiveness.

Relevance of the proposed research to business research

Such analysis is significant in business research in a number of ways. Firstly, it enables organisations to identify business opportunities that they can exploit by determining their operational inefficiencies.

Secondly, the research proposal is relevant to business research for it will enable organisations to identify new customer sub-segments that they can exploit by developing their existing products.

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Research objective

The study aims to attain a number of objectives, which include

  1. To determine what product-line mix strategies should Jaygee integrate in its marketing strategy to enhance sales performance
  2. To evaluate how Jaygee will ensure that its product line does not suffer from the slow movement of goods.
  3. To assess how Jaygee will ensure that the adopted product-line mix strategy is maintained.

Research questions

This research will aim at answering the following questions, which align with the study objectives.

  1. What product-line mix strategies should Jaygee integrate in its marketing strategy to enhance sales performance?
  2. How will Jaygee ensure that its product line does not suffer from the slow movement of goods?
  3. How will the firm ensure that the adopted product-line mix strategy incorporated is maintained?

Justification of the research

By implementing product line strategy, Jaygee can be able to stimulate demand for its products by attracting and retaining customers. Adoption of an effective product line strategy will culminate in an improvement in the effectiveness with which Jaygee satisfies its customers hence stimulating its sales revenue.

Fifield (2008: 183) asserts that profitability is a key requirement for firms’ growth and survival. Integration of optimal product line strategies is one of the elements that firms should consider in their marketing strategy development. The development of an extensive and effective product mix increases the probability of growth in firms’ sales revenue in addition to improving a firm’s competitiveness.

Ferrell, Michael, and Hartline (2011: 72) on the other hand assert that decisions associated with product mixes and product lines should be integrated in firms’ strategic management practices.

Literature review

The last few decades have been characterised by growth in proliferation of various consumer products and services. According to Hardie and Lodish (1999), firms that specialise in production of various consumer goods such as food products, apparels and footwear are pursuing diverse product expansion strategies. One of these strategies is product line extension.

Hardie and Lodish (1999) further assert that product managers perceive product line extensions to be a low cost undertaking and are effective in meeting customers’ needs by providing consumers with a wide variety of products. Currently, consumers demand variety and choice in their purchasing patterns (Nijssen 1997).

Product line extensions are also increasingly used by organisations as short-term competitive tools. Nijssen (1997) asserts that brands are amongst the most important organisational assets.

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This emanates from the fact that they can enable an organisation to differentiate and position itself in addition to establishing a strong customer relationship. An organisation can decide to integrate product line extension if the completion is high or if consumers are demanding a variety of products (Nijssen 1997).

Despite the benefits associated with product line extension, scholars warn that managers should be careful with implementing this strategy. For example, if product line becomes over segmented, the benefit of each product category cannot be obtained. Moreover, firms risk losing product loyalty by undertaking product line extension (Manusamy and Hoo 2008: 43).

In a bid to eliminate these risks, Manusamy and Hoo (2008:43) are of the opinion that product managers should ensure effective resource allocation, conduct market research to understand consumer behaviour and ensure effective coordination of marketing efforts.

Manusamy and Hoo (2008: 43) further assert that consumer behaviour is impacted by various product attributes such as quality, newness, brand name, and complexity amongst others. Consequently, it is important for marketers to differentiate their products effectively.

Sun (2010) asserts, “With line extension, companies try to exploit the potential of the brand within a product category” (p. 45). The objective of product line extension is to attract customers from competitors’ products, but not to make them turn away from original products. Firms can undertake two types of product line extension including vertical and horizontal extension.

Vertical extension entails product differentiation while horizontal extension entails integrating new brands (Sun 2010). Previous theoretical studies conducted reveal that product proliferation by incorporating a broad product line extension can stimulate demand for a particular product or service. Additionally, product line extension can enable a firm develop its competitive advantage by acting as a barrier to entry (Bayus and Putsis 1999).

According to Pophal (n.d), most big companies experience significant sales increment while those of small and medium enterprises dwindle. Big enterprises understand the importance of developing competitive advantage. Findings of studies conducted by Pride and Ferrell (2011: 75) reveal that businesses can maximise their profitability by capitalising on their existing products.

This can be attained through various product strategies such as line extension. Estelami (2010: 128) notes that one of the ways through which this can be attained is by evaluating the composition of the existing product mix. Trehan and Trehan (2008: 48) are of the opinion that it is essential for firms to develop a systematic understanding of consumer behaviour.

Such understanding forms the basis upon which a firm develops its products. One category of factors that Jaygee should consider in its operation relates to economic factors. According to Trading Economic (2012), from 1960 to 2011, the country’s average GDP amounted to $ 51.8 billion.

In December 2011, Singapore’s GDP reached an all time high of $239.7 billion. During the fourth quarter of 2012, Singapore’s GDP grew with a margin of 3.3% (Trading Economic 2012).The chart below illustrates the country’s GDP growth over the past few years.

Singapore GDP.

The country’s has relatively high purchasing power parity. In 2012, Singapore’s purchasing power parity was $ 326.7 billion, which is an increment from the $ 318.9 billion in 2011. The chart below illustrates a summary of the country’s PPP over the past decade.

Country1999200020012002200320042005200620072008200920102011
Singapore98109.8106.3105109.4120.9126.5141.2227.1237.3251.2291.9318.9

The high PPP is an indicator of the country’s per-capita income, which translates into improvement in consumers’ purchasing power. Therefore, there is likelihood of Jaygee increasing its sales revenue.

Sandhusen (2008: 56) notes, in addition to economic factors, consumer purchase behavior is also influenced by social cultural factors. Consequently, it is essential for Jaygee’s management team to evaluate the prevailing social-cultural demographics.

Stevens, Loudon, and Wrenn (2006: 105) posit that to understand the prevailing social cultural factors, it is important for a firm to evaluate the prevailing population structure. Such understanding gives marketers insight on the strategies to integrate such as targeting and differentiation strategies.

Singapore’s population has been on an upward trend due to improvement in its healthcare sector. According to Global Finance (2012), there is a high probability of the country’s population increasing to 5.85 million by 2017.The population median age is 38 years with the life expectancy being 80 years (Global Finance 2013).

Anandan (2009: 93) is of the opinion that the concept of product life cycle should be an indicator for the firm’s management team not to be comfortable with their firm dealing with only one product. This arises from the fact that decline in the firm’s sales may lead to a product exiting the market if effective product management strategies are not integrated.

Pride and Ferrell (2006: 293) define a product line as “a group of closely related products items that are considered to be a unit because of technical, marketing, or end-use considerations”. In the course of their operation, firms’ management teams have a responsibility to ensure that they design a combination of products that appeal a large number of customers (Nyholm 2002: 91).

Product line managers decide on whether to maintain, divest, build, or harvest the firms’ products (Tafani, Michel, and Rosa 2009: 203). When making product line decisions, it is important for firms’ management teams to develop a broad understanding of the firm’s product line market profile (Business Wire 2012). Therefore, a market profile analysis is paramount.

The analysis should also consider comparing the product performance of its competitors. This provides marketers with an idea on the gap to exploit. Saee (2007: 152) notes, product mix strategies enhance a firm’s long term and short-term survival by increasing the probability of maximising the sales revenue.

Product mix strategies to consider

  1. Full and limited line strategy: In this strategy, a firm offers a wide range of product variations in order to capture the total market. Full product line extension occurs only if the products added do not cannibalise the profit and sales revenue of existing products. Additionally, the firm ensures that the substantial product length is incorporated in the product mix in order to increase the chance of increasing market share and sales growth.
  2. Line stretching strategy: Firms that might have integrated full line strategy may consider incorporating product line stretching strategy. Product line stretching strategy may be implemented either downward or upward or both.
  3. Repositioning strategy: In this strategy, a firm’s brand positioning is changed in order to stimulate sales revenue in addition to enabling the product be aligned with market changes and increment in competition.
  4. Brand extension and product line strategies: This product line extension is implemented in situations whereby product variations are associated with the existing products. Consequently, new products are introduced in the market with the same brand name.
  5. Line featuring: The strategy entails promoting a specific feature in a firm’s product. Product line featuring is intended at boosting specific customer interests hence improving product image. In the process of undertaking product line , featuring some of the factors that firm’s managers take into account relates to psychological and demographic factors (Kumar 2007: 86).
  6. Line modernisation: In this strategy, firms modify their products in order to align with changes in customers’ tastes and preferences. The modified products are re-launched in the market
  7. Product concentration strategy: In this strategy, the firm ensures that products, which have a high potential for future growth are funded in order to develop a strong ground for their future marketing.
  8. Product line retrenchment: The strategy entails minimising product width by reducing product diversity.

From the literature review conducted, it is evident that Jaygee Levi store at Singapura faces a wide range of product-line mix strategies that the firm should take into account.

Methodology

Consideration of a research designs in conducting a study enables the study to be logical thus resulting into appropriate findings (Maxwell, 2005, p.5). In conducting the study, qualitative research design has been used. This enabled the researcher to acquire substantial amount of information. Selection of qualitative research design was considered due to the explanatory nature of the research.

Considering the fact that qualitative research results into gathering of a wide range of information, the quantitative research design will also be incorporated. It has made it easier for the target parties (the government and various non-governmental organizations) to interpret the research findings. Qualitative research design qualifies as one of the available exhaustive designs to give a well detailed analysis of a given element.

This arises from the fact that there is no definite procedure of conducting the study by utilizing this research design. Qualitative research design is defined as a multi-method of research which is interpretive in nature. In addition, qualitative research design is naturalistic in nature. This means that the researchers conduct a study on the subject matter by considering their natural setting.

The study will aim at conducting a comprehensive analysis of how Jaygee’s Levi Store can change its product line mix strategy in order to improve its annual sales revenue. The decision to undertake this study was prompted by the fact that the firm has been experiencing a challenge in making sales in Singapore.

Product-line mix strategy will culminate towards Jaygee stimulation of the firm’s sales revenue. One of the ways through which product-line mix strategy will achieve this goal is by increasing customer base by attracting new customers. The research will make recommendations on what Jaygee should do in its product line mix strategy.

Research design

In the process of conducting the study, qualitative research design will be used. Saunders, Lewis, and Thornhill (2009: 88) define research design as a framework of actions that guide a particular study. Integrating this research design will make the process more logical hence leading to appropriate findings that the firm can use to make the necessary changes (Maxwell 2005: 118).

Additionally, the decision to use qualitative research design is based on the need to ensure that the study conducted is in-depth and comprehensive. Qualitative research design is composed of a multi-method, which is naturalistic and interpretive in nature (Saunders, Lewis, and Thornbill 2005: 91). As a result, the researcher will be able to make the study more detailed by evaluating the subject in its natural setting.

Using qualitative research design will provide the researcher with an opportunity to utilise different research data-collection tools such as questionnaires, interviews, case study, and focus group (Maxwell 2005: 145). Consequently, it will be possible to collect a wide range of data from the market. The researcher will also incorporate quantitative research design.

This will provide the researcher with an opportunity to summarise the data using various methods effectively such as statistics. As a result, a wide range of target stakeholders will be able to understand the findings of the study. Moreover, integrating quantitative research design will aid in condensing the voluminous data that will be collected.

Population and sample

In the process of conducting the study, random sampling techniques will be used in selecting the sample. Considering the fact that the firm specialises in fashion apparel products, the firm’s management will target potential customers aged between 20 years to 60 years.

The sample to be used in the study will be selected from this age group. Incorporating a sample makes a study to be easy and manageable (Deming 2002: 90). A sample of 100 respondents will be selected using random sampling techniques.

Data collection

Bryman and Bell (2007: 63) are of the opinion that the quality of data collected from the field determines the reliability of a particular study. This study will utilise primary methods of data collection. The primary data that will be used in conducting the study will be obtained by incorporating a number of strategies.

Some of the techniques that will be used include use of interviews and questionnaires. The decision to use primary methods of data collection is to give the researcher opportunity to gain sufficient and reliable market information (Creswell 2003: 44).

Both face-to-face and telephone interviews will be used. Face-to-face interviews will be conducted by organizing a focus group interview. One of the advantages of using this method is that the researcher will be able to determine whether the respondent understands the questions asked or not.

Subsequently, the researcher will make clarifications on various research aspects thus eliminating any form of ambiguity that might arise. However, making such clarifications may unduly influence responses. Additionally, organizing focused interviews is a costly undertaking in that a substantial amount of time and money is spent.

In addition to focused group interview, the researcher will seek the opinion of customers and other lower level employees on how the firm can improve its sales revenue. This will be achieved by developing a set of questionnaires that will be issued to a selected number of customers and the firm’s lower level employees.

The advantage of using questionnaire is that it is less expensive. Using questionnaires will aid in eliminating variations that might occur from changing the research questions. As a result, consistency in the research process is attained.

Despite these advantages, questionnaires do not provide the researcher with an opportunity to make clarifications to the questions asked. As a result, the element of ambiguity might be present thus limiting the effectiveness of the research. Moreover, questionnaires might not be in-depth compared to interviews.

To effectively analyze the findings of the study, the researcher will analyse the research question individually. This will aid in condensing the data collected. The data collected will be analysed and presented using graphs and tables.

Ethical considerations

Ethics is an important consideration in the process of undertaking a particular research. Two main ethical considerations, which include responsibility towards human and non-human aspects involved in the study. Secondly, the research study should adhere to discipline of research.

Prior to the actual study, the researcher will seek permission from Jaygee’s top management team to interview the firms’ sales managers. The permission will aid in eliminating any form of suspicion amongst the firm’s employees.

By seeking permission from the relevant authorities, the researcher will also be able to obtain relevant and actual data thus enhancing credibility of the study. As a result, the researcher will be able to make an effective conclusion and recommendations on how the firm can improve its sales revenue.

An effective rapport between the interviewer and the respondents will eliminate any form of discomfort, which will result in improvement in the level of collaboration between the involved parties hence making the interviewing session more interactive.

Timescale

Timescale table.

In the process of conducting this study, a substantial amount of time will be required. Approximately, the entire study is expected to take five months to ensure that it is undertaken conclusively. Additionally, finances also form an important component of the resource requirement.

Specifically, the financial resource is necessary to ensure that comprehensive interviewing is conducted on the selected candidates. Interviewing expense is expected to amount to $ 1000.5.0 Resource requirement

Discussion

By adopting the methodology suggested, Jaygee will be able to gain insight on the most effective product-line mix strategy to adopt. This arises from the fact that the firm will gain better understanding of the prevailing market conditions. Findings of the research will form the basis upon which the firm will formulates its product line strategy. The firm will conduct a continuous review of the mix strategy in order to determine its relevance in stimulating sales.

Conclusion

The fashion industry has become very competitive and dynamic over the past decades. Consequently, it is fundamental for firms in the industry to evaluate their marketing strategies continuously.

The product strategy is one of the elements that firms’ management teams should take into account.Jaygee should focus on product line featuring, modernisation, brand extension and line stretching. This will enable the firm to align its products to market changes such as customers’ tastes and preferences.

Reference List

Anandan, C. (2009). Product management. New Delhi: Tata McGraw-Hill.

Bayus, B., and Putsis, W. (1999). ‘Product proliferation: an empirical analysis of product line determinants and market outcomes’. Marketing Science 18 (2), 137-153.

Bryman, A., and Bell, E. (2007). Business research methods. Oxford: Oxford University Press.

Business Wire (2006). Research and markets: multiple, new supply side strategies for 2012. Report explores deep product line strategies. Web.

Creswell, J. (2003). Research design: qualitative, quantitative, and mixed method Approaches. Newbury Park: Sage Publishers.

Deming, W. (2002). Sample design in business research. New York: John Wiley and Sons.

Estelami, H. (2010). Marketing turnarounds: a guide to surviving downturns and rediscovering growth. Indianapolis: Dog Ear Publishers.

Ferrell, O., Michael, S., and Hartline, M. (2011). Marketing strategy. Ohio: Cengage Learning.

Fifield, P. (2008). Marketing strategy master class. Oxford: Butterworth-Heinemann.

Global Finance (2012).. Web.

Hardie, B., and Lodish, L. (1999). ‘The logic of product line extension’. Harvard Businenss Review 3 (21), 1-6.

Index Mundi (2013).. Web.

Kumar, S. (2007). Marketing and branding: the Indian scenario. New Delhi: Dorling Kindersley.

Manusamy, J., and Hoo, W. (2008). ‘Relationship between marketing mix strategy and consumer motive: an empirical study in major Tesco stores’. Unitar Journal 4 (2), 41-57.

Maxwell, J. (2005). Qualitative research design: an interactive approach. New Jersey: Sage Publication.

Nijssen, E. (1997). ‘Success factors of line extension of fast moving consumer goods’. European Journal of Marketing 33 (5), 451-467.

Nyholm, C. (2002). Product line development: An overview. London: Sage.

Pride, W., and Ferrell, O. (2006). Marketing: concepts and strategies. Boston: Houghton.

Pophal, L. Strategic communications. Web.

Saee, J. (2007). Contemporary corporate strategy: global perspective. New Jersey: Routledge.

Sandhusen, R. (2008). Marketing. Hauppauge: Barron’s Educational Series.

Saunders, M., Lewis, P., and Thornhill, A. (2009). Research methods for business Students. New York: Prentice Hall.

Stevens, R., Loudon, D., and Wrenn, B. (2006). Marketing planning guide. New York: Routledge.

Sun, P. (2010). ‘Differentiating high involved product by trivial attributes for product line extension strategy’. European Journal of Marketing 44 (11), 1-56.

Tafani, E., Michel, G., and Rosa, E. (2009). Vertical product line extension strategies: An evaluation brand halo effect according to range level. Maine: University of Maine.

Trading Economics (2012).. Web.

Trehan, M., and Trehan, R. (2008). Advertising and sales management. London: EK.

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