A product line is, in its most general aspect, a group of products that are related to each other due to some of their characteristics, either due to their reason for use, their distribution, their segmentation or their price. Within marketing theory, in terms of product strategy, it is one of the levels at which the product hierarchy is disaggregated and one of the factors on which the marketing strategy is worked. Here is a brief bibliographic review that will allow us to expand this concept.
Definition
Monferrer (p.110) indicates that a product line encompasses a group of products that are closely related to each other because they perform similar functions, are sold to the same group of consumers, through the same distribution channels and in a similar price range.
According to Hernández and Viveros (p.212) a product line is a group of articles that are closely related, either because they are produced or marketed in the same way, or because they satisfy a kind of need or are used together. It consists of a wide group of products dedicated, in essence, to similar uses or with similar characteristics. Some examples are: Appliances: refrigerators, stoves, cupboards, etc. Electronic line: televisions, video players, stereos, among others.
Kotler and Keller (p.336) explain that a product line, within a category of products, is one that is made up of those products that are closely related either because they perform a similar function, they are sold to the same consumer groups, are sold through the same points of sale or channels, or fall within certain price ranges. A product line could consist of different brands, a single family of brands, or an individual brand whose line has been extended.
Product line strategies
In the following figure Casado (p.60) summarizes the marketing strategies that are developed around the product line.
Product Line Strategies
Casado (pp. 60-63) makes a fairly clear explanation that is reproduced below:
A. Decisions on the depth of the line
a) Decisions about pruning the line
They refer to the elimination of products from that line
b) Decisions about extending the line
A company can extend or lengthen the depth of one of its lines in two ways: completing it or enlarging it.
1. Complete the line
It involves increasing the product line with the addition of more products within the current set.
Reasons:
- Achieve additional benefits Satisfy distributors Utilize excess production capacity Offer a more complete product line Occupy market niches
2. Extend the line
It can be done downwards, upwards or in two directions.
to. Down
It occurs when the company starts out at the higher end of the market (high price, high quality) and then moves to lower parts by offering a lower quality product at a lower price.
Reasons:
- The company is attacked by a competitor at the higher end and decides to fight back by encroaching on the lower end. The company sees the upper end growing slowly or is attracted to more low-end growth. The company views the competitors at the lower end. The bottom line is weak and easy to move around The company decides to fill a niche before a competitor does The company first entered the high end to create a quality image, then better positioned at the bottom end Others:
- offer a greater variety of products, new consumer segments, uncovered productive capacity, take advantage of distribution channels.
Risks:
- It can provoke lower-end companies, causing them to fight back and go to the higher end. Sellers or distributors of the company's products may be reluctant to sell products of a lower category. The new product, which placed on the low end, it can negatively affect the image of the company.
b. Upwards
It occurs when the company starts out at the lower end of the market (low price, low quality) and then moves to higher parts by offering a higher quality product at a higher price.
Reasons:
- The company is attacked by a competitor at the lower end and decides to fight back by invading the higher end The company is attracted by the higher growth of the upper end or higher margins The company considers that the competitors located at the higher end are weak and easy to move The company decides to occupy a market niche before a competitor does.
- offer a greater variety of products, new consumer segments, uncovered productive capacity, take advantage of distribution channels.
Risks:
- May provoke higher-end companies by counterattacking and lower-end Potential customers may think that the company is not capable of delivering high-quality products Sellers or distributors of the company's products may company need additional preparation to market the higher quality products.
c. In double sense
It occurs when the company is placed in an intermediate position in the market and decides to expand in both directions. Cannibalization effect
B. Decisions on modernizing the line
Sometimes the length of the line is adequate, but the company knows that by modernizing it, it can increase the profits from the line. The company can choose to upgrade the line gradually or simultaneously. The first case allows the company to measure the acceptance of the modernized products among consumers, and to act accordingly.
C. Decisions about creating a new line
The new line may or may not be related to the company's current products, and be marketed under the same brand or under a different brand. Thus, we would have:
- Related product with the same brand Disconnected product with the same brand Related product with a different brand Disconnected product with a different brand
Bibliography
- Married Díaz, Ana Belén. Commercial address. The tools of marketing. Editorial Club Universitario, 2008. Hernández Garnica, Clotilde Maubert and Viveros, Claudio Alfonso. Fundamentals of Marketing. Pearson Education, 2012. Kotler, Philip and Keller, Kevin. Marketing Management, Pearson Education, 2012.Monferrer Tirado, Diego. Fundamentals of Marketing. Publications of the Universitat Jaume I. 2013.
