Product matrix

Contents

• What is a product matrix?
• Why is a product matrix needed?
• Groups of goods in the matrix
• How to create an assortment matrix
• Analyzing the product matrix

What is a product matrix?

A product matrix is a detailed list of all the goods or services offered by a company, indicating their categories and characteristics. It serves as an important tool for understanding the assortment that a store offers, as well as for identifying market segments covered by these products. The assortment matrix is usually visualized in the form of a table, with groups and categories of goods arranged horizontally, and key parameters such as product availability, supplier, responsible manager, brand, target audience, and the role of the item in the assortment listed vertically. The selection of parameters for the matrix depends on the specifics of each company.

Why is a product matrix needed?

A product matrix is necessary to achieve a number of goals, such as:

• Forming an assortment that meets the expectations and needs of the target audience.
• Maintaining optimal stock levels, avoiding the accumulation of non-liquid goods and shortages of popular items.
• Ensuring flexibility in the assortment and optimizing supply to quickly replace unavailable products with alternatives.
• Maintaining an optimal production cycle and avoiding overproduction.
• Achieving strategic goals, including increasing profits and expanding the customer base.
• Conducting competitive analysis to evaluate prices and identify competitive advantages.

Groups of goods in the matrix

Products in the assortment matrix are divided into several groups, each with its own objectives:

Lead products

These products are designed to attract customers to the store. Typically, these are unique or popular items with a low price, such as bananas in the fruit category or a liter of milk in the dairy section.

Complementary goods

These products complement the main assortment and increase the overall purchase amount. Examples include gift bags in a flower shop or protective mats in an electronics store.

Status products

Expensive items with unique characteristics that attract customer attention and support the store's image. For example, designer dresses or high-quality tools.

Substitute goods

These products fulfill similar needs and help retain customers. If the desired product is not on the shelf, it is important to offer an alternative.

Complex products

Sold in sets, allowing for increased profit through the sale of additional items. An example could be a burger set with fries and a drink.

How to create an assortment matrix

Creating an assortment matrix requires consideration of several key factors:

1. Define the format and layout: The store format depends on the size of the sales area and foot traffic, which influences the choice of assortment.
2. Analyze the target audience: Determine who your potential customers are and what their needs are.
3. Study competitors: Evaluate the assortment and pricing policies of key competitors.
4. Define pricing policy: Set the markup level and choose pricing strategies.
5. Group and categorize products: Classify products by common characteristics to effectively manage the assortment.
6. Create the assortment matrix: Record a complete list of products, including mandatory items that should always be in stock.

Analyzing the product matrix

The process of analyzing the product matrix should be regular. Special programs for assortment management or Excel can be used for this, especially if there are few product items. It is important to conduct ABC and XYZ analyses to assess the effectiveness of the matrix. This will help identify the real characteristics of the products and improve the store's profitability. A balanced matrix is key to successful business and meeting customer needs.