A product line denotes the group of closely linked products which the organisation offers. These products are linked together as they operate in an identical manner, used by same group of customers, have similar price range, or sold via same type of retailers. For example, ITC is a major brand producing several product lines including personal care, lifestyle retailing, education and stationary, etc. Product line is very different from product bundling, where few items combine to form a single product. The fundamental basis of all the products in a product line is same. Therefore, a good marketing plan is sufficient to improve the sales of all the products in a product line. Generally, different products with different prices are offered in a product line. In this way, the organisation makes sure that all its products under the product line are picked up by every type of customer. The act of introducing a new product in the present product line is called as ‘product line extension’. Primarily, the idea of product extension is used to avert competition. The motive behind launching products similar to that of competitors, is keeping the customers attached to the brand they are loyal with. Usually, people tend to buy products from known brands. Thus, in case of buying any new product, people prefer to purchase it from known brands rather than from any unfamiliar/unknown source.
Different Forms of Product Line Strategies
Marketers encounter several difficult decisions on product line featuring and product line length while establishing product line strategies. These product line decisions are discussed below:
Product Line Length Decisions: By including more items in the product line, if the profit increases, the product line is said to be too short. On the other hand, by eliminating few items from the product line, if the profit still increases, the product line is said to be too long. The length of any product line of an organisation is determined by its objectives. One objective may be to enhance the sales. For example, the famous brand BMW tries to encourage its customers to shift from the current BMW 3 series to the next level of BMW 5 or BMW 7 series. Another objective may be to promote the cross-selling. For example, computers as well as printers are provided by Hewlett-Packard. Protection against economic uncertainties may also be the objective of an organisation. For example, the popular brand GAP has several outlets under its flagship like old Navy, GAP, Banana Republic. etc., which offer products of various price ranges to absorb the economic changes taking place globally. A product line can be expanded by two methods namely, line stretching and line filling:
i) Product Line Stretching Decisions: The product line offered by all companies includes specific variety of items out of the complete range of products furnished by the entire industry. For example, Maruti deals with automobiles of the most economical or moderate price range in the automotive industry. If a business entity expands its product line over and above the present array, it is termed as
‘line stretching’ _ Line stretching can be exercised in the following three ways:
a) Downward Stretch: Several organisations start with offering most expensive products in the and gradually try to extend at lower levels. For example, TATA Motors deals into midsize and high end utility car segment. It has extended its product line downwards by venturing into the small vehicle segment through launching TATA Nano. The key reasons for downward stretch are as follows:
- The organisation involved in serving high end market faces tough competition and decides to cater low end market to deal with competitors.
- Presence of poor growth rate in the high end market.
- The organisation includes a low end division to avoid the entry of new competitors.
Upward Stretch: Organisations serving IOW end market may intend to move into the high end market. High level profit margins, elevated growth rate or an opportunity to feature as a full-line producer may be few reasons which may tempt organisations to enter the high end market. For example, initially Maruti was known to produce low end cars, but it moved into the high end market with the launch of Maruti Esteem and Maruti 1000. The decision of upward stretch is also risky. The well-established high end competitors may respond by plunging into the lower end market. It is not easy for sales executives as well as for suppliers/vendors to effectively perform in the high end market without proper skills and training.
c) Two-way Stretch: The organisations belonging to the mid-level of the market can extend their product line in any one way out of the two options available, i.e., either upwards or downwards.
Product Line Filling Decisions: Product line extension is also possible by including new products in the current product line. TO achieve gradual increase in profit levels, to persuade the agents with regards to the criticism faced due to decrease in sales because of the products not being present in the current product line, to make use of the surplus capacity available, to become market leader in the full-line segment. to block the loopholes to control the competitors, are the few reasons behind product line filling. Excessive product line filling may confuse the consumers and consequently reduce the sales of other products. Each item needs to have a distinct place in the consumer’s mind. The distinctness of each product should be thoroughly significant. The new product recommended should have an advantage in terms of increased market acceptance and should not be included to reassure the internal requinrements of the company.
Product Line Modernisation Decisions: Here the product, a part of the product line, is revised and relaunched to meet the contemporary styling requirements and preferences. Product lines should be updated as per the latest trends in the market. This process of modernisation can be, in terms of the technology used for the production of the product Or the appearance or style of the product. Many companies have adopted the modernisation process. For example, new look of 800cc car developed by Maruti, variety of PC chips developed by Intel, launch of Splendor plus in place of the older Splendor model by Hero Honda, etc., are the significant examples of the modernisation decisions. It is a strategy where the company introduces new items in place of old ones dropped out. Product line modernisation is a constant process in today’s fast transfonning product market. The consumers are inspired to shift their preferences towards expensive and high-end products due to constant improvements formulated by the companies.
Product Line Featuring Decisions: This is all about deciding which product(s) to feature in the organisation’s product line. The manager deciding the product line strategies picks up one or more products from the product line to represent as a flagship product or a prominent item Of the line to increase the demand. This kind of decision is taken in case of presence of several non-profitable items in the product line. Thus, line featuring helpful in elevating the sales volume of the organisation. For example, Dream Service is the current focus of marketing campaigns of Honda.
Product Line Pruning Decisions: This strategy finds out the products which are poor performers in terms of profit earning potential in the product line and removes them from the line to increase the earning potential of the company. This process decreases the length of the product line. This process is adapted by the company when it is unable to earn the expected profit levels or when a specific pattern is not well received by the customers or not being beneficial for the growth of the organisation. Pruning decisions can be taken to make physical or human resources available for Other capable models which are being utilised by the unproductive model.
