A product line is a group of related products offered by a company under a single brand or category. These products share similarities in function, target market, distribution channels, or branding strategy but are tailored to meet varying customer preferences or price points. Product line decisions are a crucial component of a firm’s marketing strategy and directly impact the overall product mix.
Examples:
- Coca-Cola’s Product Line: Regular Coke, Diet Coke, Coke Zero and Coke with Stevia.
- Apple’s Product Line: iPhone models with different specifications (e.g., iPhone 14, iPhone 14 Pro, iPhone SE).
Key Features of a Product Line
1. Homogeneity
Products in a line are related in terms of functionality, target audience, or manufacturing process.
- Example: Samsung’s smartphones range from entry-level to premium categories.
2. Variations in Features
While products within a line are similar, they differ in terms of specific features, size, quality, or pricing.
- Example: Maruti Suzuki offers Alto, Swift and Baleno, targeting different income groups.
3. Common Branding
Products in a line often share the same brand name or logo, strengthening brand recognition.
- Example: Dettol soap, hand wash and disinfectant.
Dimensions of a Product Line
1. Product Line Length
The total number of items in a product line.
- Example: Nike’s footwear line includes running shoes, basketball shoes and casual sneakers.
2. Product Line Depth
The number of variations offered within a single product line.
- Example: Baskin-Robbins offers 31 flavors of ice cream under its product line.
3. Product Line Width
The number of different product lines a company offers. While this pertains to the product mix, it helps understand the variety of lines a company maintains.
Product Line Strategies
Product line strategies are decisions companies make about adding, modifying, or removing items in the product line.
1. Product Line Filling
Adding more products within the existing range to address gaps or meet diverse needs.
- Example: L'Oréal launching more shades of foundation to cater to various skin tones.
2. Product Line Extension
Expanding the product line by introducing related products. This can be of two types:
- Upward Stretch: Adding premium products to target higher-income segments.
- Example: Toyota launching Lexus, a luxury car line.
- Downward Stretch: Introducing affordable versions for price-sensitive customers.
- Example: Samsung introducing Galaxy M-series for budget-conscious users.
- Two-Way Stretch: Adding both premium and budget products.
- Example: Marriott hotels offering Ritz-Carlton (premium) and Fairfield Inn (economy).
3. Product Line Pruning
Removing underperforming or outdated products to optimize resources.
- Example: Coca-Cola discontinuing certain flavors due to low sales.
Benefits of an Effective Product Line Strategy
1. Enhanced Market Coverage
By offering a range of products, companies can cater to different customer needs and price sensitivities.
- Example: Tata Motors’ Nano for budget buyers and Jaguar for luxury buyers.
2. Stronger Brand Equity
A well-managed product line strengthens the brand and builds customer loyalty.
- Example: All products under the Dove brand emphasize "gentle care."
3. Economies of Scale
Shared production processes, distribution channels and marketing efforts reduce costs.
4. Risk Diversification
A broad product line minimizes dependence on a single product's success.
Challenges in Managing Product Lines
1. Risk of Cannibalization
Introducing similar products may lead to competition within the brand itself.
- Example: PepsiCo’s Diet Pepsi and Pepsi Zero Sugar competing for the same customer base.
2. Overextension
Having too many products may confuse customers and dilute the brand.
- Example: Unilever pruning its extensive product lines in the early 2000s to focus on core brands.
3. Cost of Development
Expanding a product line requires investment in R&D, production and marketing.
Examples of Successful Product Lines
1. Amazon Echo Devices
- Product Line: Echo Dot, Echo Studio, Echo Show.
- Strategy: Different models cater to customers seeking basic, advanced, or screen-enabled smart speakers.
2. Nestlé’s KitKat
- Product Line: KitKat Classic, KitKat Dark, KitKat Chunky, KitKat Green Tea.
- Strategy: Variations cater to different taste preferences and regions.
Stay tuned for the next discussion on Product Mix Decisions, which will delve deeper into the broader strategy involving multiple product lines.