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Factors Influencing Product Mix
The fundamental reason for changing product line, i.e., adding or eliminating products, is the change in market demand.


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Change in demand occurs due to the following factors:
a) Population increase.
b)
Changes in the level of income of buyers.
c)
Changes in consumer behavior.

In India, there is an never increasing rate in the growth of population. This naturally adds to the number of buyers leading to a quantitative change in the volume of production. The developmental programmes of the Government ensure increase in income enabling the consumers to spend more. This also adds to the stream of demand qualitatively and quantitatively. In India 'Rural markets' are evolved mainly due to this reason. The consumer behavior is a continuous source of reasons that invite changes in product planning. The other reasons could be narrated as follows:

1. Marketing influences.
2.
Production influences.
3.
Financial influences.

All these arise out of internal economies of a firm. As long as the profit motive is the criterion for the existence of a firm, changes in production mix are inevitable.

From the foregoing discussion, it is clear that product planning has assumed front rank importance in modern market oriented business. Not only that, product planning also invites intelligent, appropriate and scientific approach. The case history of the most successful companies has convinced that product planning calls for the highest degree of top management ability and effort. It also makes it clear that under the changing marketing conditions one has to see thingsiclearly before undertaking the production of any product. Hence, it is said “marketing activities precede production activities”.

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