Q.No.2. Case Study (Marks 6)

The IT company is a small chain of distributors of good quality laptops, softwares, web sites Apps etc. . Within each category, the company offers a wide variety of products, with a great many variations of each product being offered. For example, the company currently offers one type of Laptop some 4 different designs of softwares and 1000 varieties of off websites and Apps. The company keeps in touch with advances made in the IT field worldwide and introduces those products which are in keeping with the needs of the market in terms of design, workmanship, value for money and technical specifications.

Fine IT trades only in good quality Laptops and softwares. Differences between its products and cheaper, lower quality ones are well known to those who have several years of experience in the business.

An important feature the company feels is the availability of a complete list of components of the Laptops and software system. This enables customers to add bits and pieces of matching designs and features in the laptop and Software. Such components are available for sale separately. Systems are maintained in stock by the company for a number of years, and parts for Laptops and other software are always available.

The trade is currently witnessing a downturn due to recession. Fine furnishing has l also experienced the same over the past two years. In addition, it had to trim its profit margins. Last year, it barely broke even and this year it is heading for a loss for the first time in the company's twenty year history.

i) Explain the term product-item, product-line and product mix in the context of the above situation.

ii) Advice the company in relation to its product mixes. How will your recommendations affect the company's image?