how product lines work
product lines are created by companies as a marketing strategy to capture the sales of consumers who are already buying the brand the operating principle is that consumers are more likely to respond positively to brands they know and love and will be willing to buy the new products based on their positive experiences with the brand in the past for example a cosmetic company that s already selling a high priced product line of makeup that might include foundation eyeliner mascara and lipstick under one of its well known brands might launch a product line under the same brand name but at a lower price point product lines can vary in quality price and target market companies use product lines to gauge trends which helps them to determine which markets to target the evolution of product linescompanies add new items to their product lines sometimes referred to as a product line extension to introduce brands to new customers consumers who have no interest in a company s sporting goods for example might be more interested in buying its product line of energy bars or sports beverages extending product lines allows companies to maximize their reach the way that companies use product lines is evident in the auto industry auto manufacturers famously produce various product lines of vehicles to reach the widest possible range of consumers for this reason they produce lines of economy vehicles environmentally friendly vehicles and luxury vehicles all under their leading brands some are marketed to families some to individuals and others to the young expanding product lines enables a company to target consumers who are either already buying the brand or are likely to buy the brand product line vs product mixa product line refers to a particular good or service that a company makes and markets to customers a food company may extend a product line by adding various similar or related products e g adding mesquite bbq flavor to its existing potato chips line and create a more diversified product family the product family supplies various products under the same brand name that are similar but meet slightly different needs or tastes potentially attracting more and different customers if the company branches out and starts producing pretzels this would be a different product line altogether involving different ingredients processes and knowledge to make it would also attract many of the same but also different customers as its potato chips line pretzels however would not be in the same product line or family thus adding pretzels expands the firm s product portfolio also known as its product mix the product mix is important to analyze since it can identify which market segments are experiencing what trends companies may thus re brand or restructure underperforming and unprofitable products while profitable lines may be tagged to include innovative or riskier new additions to that product family mature companies often have diversified product mixes internal product development and acquisitions contribute to its product portfolio size over time and larger enterprises have the infrastructure to support the marketing of a broader offering geographic expansion can also augment a product portfolio with products varying in popularity among cities or countries apple inc for example now has a product mix that includes its wildly popular iphone devices within which are various generations versions sizes all at different price points the ios app store its line of laptop desktop computers software development music streaming service apple tv and so on special considerationsproduct lines allow companies to reach regions and socioeconomic groups sometimes even worldwide in some cases such as the cosmetic industry companies also launch product lines under their best selling brands to capture sales from consumers of various ethnic or age groups multinational corporations such as restaurants often launch product lines specifically for the countries in which they operate as is the case with fast food restaurants operating in asia unprofitable product lines may still be useful for a company a loss leader strategy for example introduces new customers to a service or product in the hopes of building a customer base and securing future recurring revenue the product loses money but is sold to attract new customers or sell additional products and services to those customers that are profitable in the future examples of product linesnote that some companies never diversify beyond a single product line instead they focus their efforts on becoming a market leader in just one thing michelin for instance only produces tires crocs only makes rubber based footwear gorilla glue only makes adhesives frequently asked questionswhile a company s product lines will depend on the particular business segment or industry that it operates in marketing and organizational scholars have identified four different classifications of product line based on what is needed to bring that line to market these include filling refers to adding more items to a product line family in order to address any perceived gaps in the potential customer base for instance adding larger sizes to a clothing line can accommodate people with bigger bodies having sizes that fit the vast majority of individuals would fill that product line along that dimension offering different versions of an otherwise same product or service at different price points can help fill a product line based on consumer spending preferences and affluence car manufacturers typically offer the same base model for a given year in different trim ranging from a no frills economy version to a decked out luxury version with all the expensive add ons these price points will attract different consumers with different budgets a company will develop a product line based on the type of business it is its particular expertise and its marketing strategy market testing r d and advertising campaigns are all important to bring a product line to market unsuccessful product lines that are unprofitable should be abandoned in favor of viable ones 