What is a product line?
A product line can be defined as a set of products offered by a company that are similar in function and benefit. These sets of products are also usually sold through the same distribution channels to the same target market at a relatively similar price range.
In many ways, the decision of a product line and its length (that is the number of products offered) is quite a strategic decision and is part of a firm’s competitive marketing strategy.
Purpose of a product line
A firm will usually have more than one product in a product line and offer variations of a product.
For example, a fast food restaurant is likely to offer different variations of a hamburger. The purpose of this multiple offering is to try and meet the needs of different people at different times.
Likewise, a manufacturer of a television set is likely to offer a range of different sizes, qualities, and functions, at different price points in order to meet the needs of a broader range of consumers and to match competitor offerings.
Examples of product lines
Coca-Cola would have the following product lines: soft drinks, water, sports drinks, energy drinks, and juices. As we know, Coke offers a broad variety of soft drinks marketed under different brands. They also have a multi-brand approach to their other product lines. As you should see, each related set of products is considered to be a product line.
If we take the example of Apple – their product lines would include: smart phones, MP3 players, tablets, computers, smart watches, and online services. Under each of these product lines they would offer a variety of different products.
Product line length
Firms generally increase their product line length
One of the key decisions that a firm needs to make is the length of its product line. That means, how many products varieties should the firm offer. Generally, firms look to increase the product line length – the number of similar products offered.
As we know, and effective way of usually growing a firm’s business is to expand its product range and develop products for existing channels and existing target markets.
Don’t overfill the product line
But firms need to be careful not to overfill their product line. One of the dangers of having too many products in the product line is that some products will not sell well and will not recover the manufacturing costs – primarily due to product cannibalization.
As an example let’s consider a bank that is offering credit cards. A large bank may have 15 to 20 different credit cards available in the product line. These would offer different fees, rates, flexibility and rewards programs and would probably be tailored to different patterns of financial behavior.
But there would probably be little point in expanding the product line to 100 different credit card offerings. Many of these would not be sold and it would create confusion at the point-of-sale and make it awkward in terms of clearly communicating to customers the range of suitable offers.
Product line replacement
As a result of the concerns above with having too many products in the product offering, firms will make the decision to replace products as new ones are developed. For example, a manufacturer of furniture may introduce a new set of tables and chairs to their product line, but at the same time remove a number set of tables and chairs from a their offering. This is known as product line replacement.
