Product Line6th February 2020
A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names, seeking to distinguish them from each other for better usability for consumers.
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 lines allow companies to reach regions and socioeconomic groups, sometimes even worldwide. In some cases, such as the cosmetic industry, companies also launch product lines under their best-selling brands to capture sales from consumers of various ethnic or age groups. Multinational corporations, such as restaurants, often launch product lines specifically for the countries in which they operate, as is the case with fast food restaurants operating in Asia.
How Product Lines Work?
Product lines are created by companies as a marketing strategy to capture the sales of consumers who are already buying the brand. The operating principle is that consumers are more likely to respond positively to brands they know and love and will be willing to buy the new products based on their positive experiences with the brand in the past.
For example, a cosmetic company that’s already selling a high-priced product line of makeup (that might include foundation, concealer, powder, blush, eyeliner, eye shadow, mascara, and lipstick) under one of its well-known brands might launch a product line under the same brand name but at a lower price point. Product lines can vary in quality, price, and target market. Companies use product lines to gauge trends, which helps them to determine which markets to target.
Product Line Extension
When a new product is introduced by the company which is a quite different from the company’s current range of products is called Product line extension. It expands the choice of the customers under a single brand. The merits of product line extension are:
The risk of new product development reduces when the new variant is launched to the existing product line. The present customers are familiar with the existing product line and if a new product offers the same quality and fulfills the needs of the customers, that it claims, then it results in the reduction of risk
- Customer Loyalty
When a company extends its product line by introducing a varied product, the customers will choose the company’s product over its competitors which will help in maintaining customer loyalty.
- Market expansion
It is obvious that the extension in the product line will widen the choice of customers and thus increase market share. The company can also offer higher and low price version to cater different customer segments, which meets customer requirements.
Customers are likely to buy the product offered by an existing and familiar brand. Nevertheless, branding becomes difficult when the company offers low-priced line products, as it may harm the parent brand if less quality is offered. In such a case it is better to offer a low-priced product with different brand name.
- Product versions
Introducing a number of versions of a single product, is considered as low-risk strategy, wherein each version may have some additional or reduced features, as compared to the basic one. This may help in attracting more and more customers.
Making an addition to the existing line of products is considered as the best strategy to expand the business as people are usually attracted towards the products of those brands which they have already used or which they can easily rely upon.
The Evolution of Product Lines
Companies add new items to their product lines, sometimes referred to as a product-line extension, to introduce brands to new customers. Consumers who have no interest in a company’s sporting good products, for example, might be more interested in buying its product line of energy bars or sports beverages. Extending product lines allows companies to maximize their reach.
The way that companies use product lines is clearly evident in the auto industry. Auto manufacturers famously produce various product lines of vehicles to reach the widest possible range of consumers.
For this reason, they produce lines of economy vehicles, environmentally friendly vehicles and luxury vehicles all under their leading brands. Some are marketed to families, some to individuals, some to the young, some to the old—some are marketed to everybody.
Examples of Product Lines
Microsoft Corporation (MSFT) as a brand sells several highly recognized product lines including Windows, Office, Xbox, and SharePoint. Nike Inc. (NKE) has product lines for various sports, such as track and field, basketball, and soccer. The company’s product lines include footwear, clothing, and equipment. PepsiCo (PEP) owns and markets under, among many other lines globally, Frito Lay, Gatorade, Quaker Oats, Tropicana and Garden of Eatin’. The product lines for Starbucks Corporation (SBUX) include coffee, ice cream, and drinkware.
- A product line is a group of connected products marketed under a single brand name by the same company.
- Companies sell multiple product lines under their various brand names, often differentiating by price, quality, country, or targeted demographic.
- Companies often expand their offerings by adding to existing product lines because consumers are more likely to buy products from brands they already know.
- A product line is a marketing strategy that enables a company to expand its business by targeting consumers who are either already buying the brand or are likely to buy the brand.