Product Line

What is a Product Line?

A product line is a group of interrelated products fulfilling the identical needs and wants of the customers under a single brand sold by the same company. Companies often expand their offerings by adding to existing product lines, because consumers are more likely to purchase products from brands with which they are already familiar. Product lining is the marketing strategy of offering several related products for sale as individual units. A product line can comprise related products of various sizes, types, colors, qualities, or prices.

Product Line Definition

Product Line with Example

Product Line Extension

When a company launches a new product that is somewhat different from the company’s existing range, the procedure is known as “product line extension.” Product line extension aims to provide more options to customers under one brand. Product line extension comes with several benefits and drawbacks which areexplained below:

Merits of Product Lines Extension

• The firm’s product line extension strategy is designed to attract the same target audience that is interested in variety. It elevates the firm’s excellent customer service and overall satisfaction.
• The brand gets more shelf space in retail stores with more products in the same type and line. As a result, it increases its market reach and market share, while enhancing its brand identity.
• Having already established its brand and brand perception in the marketplace, a company can save money on marketing and promotion for other products within the same category.
• By offering a wide variety of options, the company enjoys a competitive advantage against its contemporary competitors. Many options are available, including flavors, shapes, sizes, prices, packaging, and more.
• The firm can cater to different segments of the market with its Product Line Extension strategy, such as those who want the product in other variants such as shape, color, flavor, and many others.

Demerits of Product Lines Extension

• It is not uncommon for Product Line Extensions to backfire and reduce the sales and brand value of the original product if the firm does not fully understand the market dynamics and the changing tastes of the customers.
• There are occasions when marketers go overboard on the front of marketing and promotional expenditure with the product line extension, adding to the overhead expenses of the firm.
• It is detrimental to the brand loyalty and value of the original product if the Product Line Extension is not very well received by the target audience.
• The number of options and alternatives available invariably kills the unique appeal and unique attributes of the original product.
• In order to stay relevant in the market, the competitor of the brand comes up with a strategy of their own and comes up with a Product Line Extension. A competitor’s better products can affect the profits and sales of the company if their features and attributes are superior.

How Product Lines Work

Companies create product lines to capture the sales of consumers who already buy the brand. Consumers are more likely to buy new products from companies they know and love, based on past positive experiences with the brand.An existing cosmetics company might begin selling a lower-cost line of makeup under the same brand name but at a lower price point, for example, if it was already selling a high-end makeup line (that includes foundation, eyeliner, mascara, and lipstick). Quality, price, and target market can vary between product lines. To determine which markets to target, companies look at product lines to gauge trends.

To persuade more people to buy, a company adds new products to its product line. Think about a company that sells homemade nut milk, for instance. Many people are allergic to animal milk, but homemade nut milk has a lot of benefits that drinkers can take advantage of, such as assisting weight loss. In order to appeal to people on a diet, the company produces a less sweet homemade nut milk. This is one way to attract a wider customer base.

A company’s product line can also be a competitive advantage. A brand can stand out from the rest of its competitors by creating the right product line. To go up against the other coffee companies in district A, one company may add tea or smoothies to its product line.

Marketers include product lines in their marketing campaigns consistently. Marketers need to be clear about their purpose and aim in order to form a marketing plan that incorporates the product line. For this reason, a product manager is often in charge of building a plan in conjunction with a marketer.

Product Line Depth

It is important to understand the concept of “product line depth” when talking about product lines. This refers to the number of products available within a product line. There is no ideal number of product line depths – a product line may have a depth of five or nine and still be successful. The problem with having too few options for customers is that too many choices dilute the perception of the brand, resulting in cannibalized sales. Let’s look at two examples:

1) Low Depth

A company may keep a line of fruit-based beverages consisting of a mango drink and a strawberry drink as the depth of the line (two products under the line). Due to the unavailability of grape drinks, a customer who prefers them might not be a customer. Thus, the company would have a smaller target market and sales would decline.

2) High Depth

There may be a company that keeps a fruit-based product line depth of five (five different fruit products under one product line), including mango drink, strawberry drink, guava drink, grape drink, and watermelon drink. One product may be unpopular and adversely affect a company if an array of products is kept. Consider the case of a watermelon drink that cost $100,000 to develop, but only sold $5,000.

In order to maintain balance, there should be a limited number of products in a product line. Conducting a market research can help determine the ideal number of products to offer in a product line.

Product Line Considerations

a) Product-line Analysis

A marketer should review the actual position of the company’s product line in relation to its profit and sales. He should also review the competitors’ position in the same market area. This analysis will help the marketer to decide whether the company should expand the company’s product line, or improve the existing product line, or remain as it is, or reduce the product line.

b) Product-Line Length

It refers to the total number of interrelated items the company produces. The general thinking is that the number of items should be optimal or manageable. However, the company’s product line length decision is affected by company objectives. Product lines usually tend to lengthen over time.

c) Modernization Decision

Although the length is optimal, all the items may not be equally effective. Some items may be weaker in generating adequate sales and profits for the company. Under such circumstances, the company has to modernize such soft items by maintaining or improving their quality using modern technology, or other steps determined by the company.

d) Line Featuring Decision

Sometimes marketers may select one or a few items in the line to develop them as the ‘promotional’ or ‘leader’ items, as it is not possible to modernize all items in the line. By featuring few items, a company can build up its image in the market. This image will be helpful to boost up the sales of other items not featured, thus generate adequate profits.

e) Line Pruning Decision

Some items in the line may cause loss or headache to the company. When a company thinks that featuring or modernizing them cannot this problem, the company may drop or remove such items from the line and continue the high margin items in the line. This type of decision is known as the line-pruning decision.

The company may make such a decision when the profits are depreciated by lengthening the items in the line, and when a company lacks production capacity to produce all the existing items.

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