Contents
- What is a product line?
- Expansion of the product line
- Strategies for stretching the product line
- Analysis of the product line and its significance
- Conclusion
What is a product line?
A product line is a group of products that serve a similar purpose but differ in certain characteristics. These differences may relate to the target audience, functionality, or even price segment. For example, a product line may include inexpensive chocolate candies and chocolate bars aimed at teenagers, while premium chocolates form a separate line.
Expansion of the product line
When launching new products, companies often do not change the concept of their product line but simply add new offerings. For instance, if a brand that previously produced blue pens decides to complement its range with black pens at a similar price for the same target audience, this is considered an expansion of the product line. However, it is also possible to stretch the product line in different directions.
Stretching the product line downward
Stretching the product line downward involves launching products at a lower price but in larger quantities. This can be observed, for example, when a luxury cosmetics brand launches inexpensive face masks for a broader audience.
Stretching the product line upward
Stretching the product line upward, on the other hand, involves creating fewer products but at a higher price. A vivid example is the strategy of Starbucks, which offered takeout coffee at a high price point. This was due to the unique packaging design and presentation, including writing customers' names on cups.
Strategies for stretching the product line
Automakers often use the strategy of stretching the product line upward. For example, Nissan launched a premium line of cars, Infinity, while Toyota introduced Lexus. This allows them to occupy higher price segments and attract customers willing to pay more for quality and prestige.
Combination of directions
Interestingly, large brands often employ a strategy of stretching the product line in both directions simultaneously: upward and downward. This allows them to maximize their market share. An example is the Marriott hotel chain, which operates several segments of hotels: from the budget-friendly Fairfield Inn to the premium JW Marriott.
Analysis of the product line and its significance
Analysis of the product line plays a crucial role in marketing, especially when launching new products. It allows for exploring consumer demand for similar groups of products, which in turn helps develop a unique selling proposition (USP). Proper understanding of market needs and target audience can significantly increase the chances of a successful new product launch.
Entry strategy into the product line
It is also important to determine the entry strategy into the product line in advance to avoid reputational risks. For example, it is necessary to decide whether to launch a new product under an already existing brand or to develop a new one. This is particularly critical, as stretching the product line can threaten the brand's image if consumer opinions are not taken into account.
Conclusion
A product line is a powerful tool for companies seeking to increase their market share. The right strategies for stretching lines, whether upward or downward, can lead to significant success. Companies that can effectively analyze and manage their product lines are capable not only of attracting new customers but also of maintaining the loyalty of existing ones, which is a key factor in a competitive environment.