Logo
Logo
Log inSign up
Logo

Tools

AI Concept MapsAI Mind MapsAI Study NotesAI FlashcardsAI Quizzes

Resources

BlogTemplate

Info

PricingFAQTeam

info@algoreducation.com

Corso Castelfidardo 30A, Torino (TO), Italy

Algor Lab S.r.l. - Startup Innovativa - P.IVA IT12537010014

Privacy PolicyCookie PolicyTerms and Conditions

Product Lines and Their Management

Exploring the intricacies of product lines in business, this content delves into strategies for effective management, diversification through various types of product lines, and pricing techniques. It highlights how companies like Coca-Cola, Apple, and Nike leverage their product mix to target specific customer segments and enhance brand loyalty. The text also distinguishes between product lines and product mix, detailing the four dimensions that characterize a company's product offerings.

See more
Open map in editor

1

5

Open map in editor

Want to create maps from your material?

Insert your material in few seconds you will have your Algor Card with maps, summaries, flashcards and quizzes.

Try Algor

Learn with Algor Education flashcards

Click on each Card to learn more about the topic

1

Product Mix Definition

Click to check the answer

Total assortment of products that a company offers, including all product lines and individual products.

2

Role of Brand Loyalty in Product Lines

Click to check the answer

Encourages repeat purchases by associating multiple related products with a trusted brand, enhancing customer retention.

3

Cost Reduction via Product Lines

Click to check the answer

Lowers marketing and operational expenses by selling multiple related products under a single brand, utilizing established customer base.

4

Companies may alter the ______ of their product line to appeal to different market segments or improve profitability.

Click to check the answer

length

5

______ involves adding new items to address market needs or target different price levels, while ______ means removing weaker items.

Click to check the answer

Line expansion line contraction

6

To stay competitive, a company like ______ regularly updates its ______ products.

Click to check the answer

Colgate toothpaste

7

Types of 'new to the world' products

Click to check the answer

Products that create entirely new market categories, not previously existing.

8

Meaning of product line extensions

Click to check the answer

Additions of new variations to an existing product line, expanding choices.

9

Purpose of product repositioning

Click to check the answer

Targets new applications or markets for established products, altering perception.

10

In ______ ______, businesses set various price points for different versions of a product to match consumer preferences and budgets.

Click to check the answer

Product line pricing

11

______ pricing is a strategy where the main product is priced competitively, but complementary items are sold at premium prices.

Click to check the answer

Captive

12

Definition of product mix

Click to check the answer

Total range of products offered by a company across all its product lines.

13

Purpose of varied items in a product line

Click to check the answer

To satisfy different customer needs and preferences within a market segment.

14

The scope of a company's product mix may be affected by its ______, financial capacity, and standing in the market.

Click to check the answer

history

15

Product Mix Length

Click to check the answer

Total number of individual products across all lines.

16

Product Mix Width

Click to check the answer

Number of different product lines offered by a company.

17

Product Mix Consistency

Click to check the answer

How closely related products are within a line.

Q&A

Here's a list of frequently asked questions on this topic

Similar Contents

Economics

Marketing Channels

View document

Economics

The Importance of Consumer Insights in Business Strategies

View document

Economics

Trade Marketing

View document

Economics

Understanding Customer Needs and Market Demand

View document

Exploring Product Lines in Business

A product line refers to a group of related products that are offered under a single brand name, targeting specific customer segments and fitting within particular price categories. Companies often manage a variety of product lines under different brands, collectively known as the product mix. For example, the Coca-Cola Company's product mix includes a diverse range of beverages such as soft drinks, juices, and water, each category comprising several product lines. Product lines are strategically developed to leverage the success of existing products, diversify the company's offerings, and increase sales by fostering brand loyalty and reducing the costs associated with acquiring new customers.
Organized retail shelf with electronic devices, gradient-colored water bottles, wooden kitchen utensils, and skincare products on light wood, soft lighting.

Effective Product Line Management Strategies

To manage product lines effectively, companies implement a range of strategies. One such strategy is to adjust the product line length, which is the number of items within a product line. A longer product line can cater to a wider market segment, while a shorter line may be more focused on maximizing profitability. Line expansion, which includes product line filling and stretching, introduces new products to fill market gaps or to reach different market segments at varying price levels. In contrast, line contraction involves eliminating underperforming products to streamline the line and make space for more profitable or relevant items. Product line modification is another strategy, where existing products are updated or improved to maintain competitiveness, as demonstrated by Colgate's ongoing enhancements to its toothpaste products.

Diversification through Different Types of Product Lines

Diversification of a company's portfolio can be achieved through the introduction of different types of product lines. These include groundbreaking 'new to the world' products that introduce entirely new market categories, as well as product line extensions that add new variations to an existing line. Product improvements focus on upgrading and adding value to current products, while repositioning targets new applications or markets for established products. For instance, Apple has diversified its product line with a range of iPhone models, representing product line extensions. Nokia's pivot from consumer mobile phones to providing B2B telecommunications services is an example of repositioning.

Product Line Pricing Techniques

Product line pricing involves setting different price points for various versions of a product or service to appeal to different consumer preferences and budgets. This approach enables businesses to capture a broader market and accommodate customers with varying financial means. Key pricing strategies include bundle pricing, which offers a set of products at a reduced price; leader pricing, which uses a low-priced item to draw customers; bait pricing, which entices customers with a low-priced product with the intention of upselling; and captive pricing, which involves pricing core products competitively while charging premium prices for complementary products.

Case Studies of Product Lines in the Marketplace

Notable examples of product lines in the marketplace include The Body Shop's extensive range of beauty and skincare products, Nike's assortment of athletic footwear, apparel, and equipment, and Starbucks' selection of coffee, tea, food items, and branded merchandise. Each of these companies maintains a product mix that consists of multiple product lines, with each line offering a variety of items designed to meet the diverse needs and preferences of different customer segments.

Clarifying Product Line Versus Product Mix

It is important to distinguish between a product line and a product mix. A product line is a set of related products offered by a company, while the product mix refers to the total assortment of products that a company sells. The breadth of a product mix can be influenced by various factors, including the company's history, financial resources, and market reputation. A well-managed product mix provides opportunities for cross-selling, which can enhance a company's marketing effectiveness by promoting complementary products to existing customers.

The Four Dimensions of a Product Mix

A company's product mix is characterized by four key dimensions: length, width, depth, and consistency. The length is the total number of individual products across all product lines, width refers to the number of different product lines a company offers, depth indicates the number of variations within each product line, and consistency relates to how closely related the products are within a product line. Understanding these dimensions helps businesses evaluate the diversity of their product offerings and ensure that their product mix aligns with their overall market strategy and brand identity.