Product line consists of different products that are closely related to each other, in the sense, that they satisfy a particular class of needs, or are used together, or are distributed through the same channels, or possess common physical or channel characteristics.

In other words, a product line refers to a group of products clubbed together because they have one of the above described characteristics in common. The number of product lines carried by a firm at a given point in time is a function of its resources and competitive position. For example, TELCO continued to be a single product line firm until mid-1980s, when its competitive position was threatened in the heavy motor vehicles market by the low cost, more efficient Japanese light commercial vehicles (LCVs). TELCO responded by developing its own LCV and also by diversifying into the passenger car segment. This was a new product line as it catered to a different group, different need and also required different channels of distribution.

Product Line Strategies

A company has several strategies at its disposal with respect to the width, depth and consistency of its product mix. Most of these strategies involve a change in the product mix. Major product line strategies are:

1. Alteration of Existing Products: Sometimes experience may show that improving an existing product may be more profitable and risky than developing and launching a new product. Alterations may be made either in the design, size, color, texture, or flavor, or packaging, or in the use of raw materials or in the advertising appeal, or quality may be changed. This strategy is to be followed regardless of the width and depth of the product mix.

2. Trading Up And Trading Down: It involves an expansion of the product line as well as the promotional strategies. Trading up refers to the adding of a higher priced prestige product to the existing lines with the intention of increasing sales of the existing low-priced products. Under trading up, the seller continues to depend upon the older, low priced product for the major position of the sales. Ultimately, he may shift the promotional emphasis to the new product so that large share of sales may go to the new products.

Trading down refers to the adding of the low priced items to its line of prestige product, with the expectation that the people who cannot buy the original product may buy these new ones because these carry same of the status of the higher priced goods. An instance on the point is that of Allwyn Company which attempted to broaden its market for Allwyn Refrigerators by introducing five sizes in an attempt to compete at all price levels. Wills cigarettes also traded down by bringing out the lower priced Wills Flake cigarette pack.

But this type of trading up and trading down is harmful because, the consumer may be confused about the new product, and the sale in the new line is also adversely affected as it is done at the expense of the older product. This situation may be avoided by using differentiating brands, channels of distribution; promotional program, or product design.

3. Product Differentiation and Market Segmentation: These strategies are often employed by the firms who wish to engage in non-price competition in markets characterized by the imperfect or monopolistic competition. Since these strategies require large financial involvement in promotional efforts they are usually known as both promotional and product planning strategies.

Under market segmentation strategy, the seller knows that the total market is made of many smaller homogeneous units, each of which of its units has different wants, motivations etc. To meet these different demands, different products are developed i.e., products are tailor made to suit these requirements. This strategy attempts to penetrate a limited market in depth, whereas the product differentiation seeks breadth in a more generalized market. Smith observed that “the differentiator seeks to secure a layer of the market cake, where as one who employs segmentation strives to secure one or more wedge shaped pieces.”

Product differentiation involves developing and promoting and awareness of differences between the advertiser’s product an the products of the competitors. The strategy when used enables a company to remove itself from price competition so that it may compete on the non-price basis viz., that its product is different from and better than, competitive models. This differentiation is done either in quality, design, brand, or packaging, where reasonably standardized products are sold, such as soaps, cigarettes, petrol etc. to a broad horizontal market which is fairly homogeneous in its wants. This strategy is mostly used.

4. Expansion Of Product Mix: Expanding the line may be valid decision if it is in an area in which consumers traditionally enjoy a wide variety of brands to choose from and are accustomed to switching from one to another or if the competitors lack a comparable product or if competitors have already expanded into this area themselves. However, the main limitation in expansion is the availability of sufficient finance, time and equipment. Expansion in the present product mix may be done by increasing the number of lines and the depth within a line. Such new lines may be related or unrelated to the present products. For example, the large provision stores may add drugs, cosmetics and house wares while at the same time increasing their assortments of dry fruits, baby food etc.

5. Contraction of Product Mix: This is rather more difficult, because much money has already been invested, and therefore, as far as possible, products are allowed to linger on far long until they become a loss. When contraction is decided upon various alternatives are available to the marketers. The product may be consolidated with several others in the line so that fewer styles, sizes or added benefits are offered or, the position can be simplified within a line. If even then a product fails, the company may stop it altogether.

6. Development Of New Uses For Existing Products: The company may find out new uses for the existing products as Wheel or Nirma may be used not only for washing clothes but also for cleansing the floor utensils and glass products.

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