Key Takeaways:
- Firms diversify their brands by offering different product lines
- Expanding product lines helps strengthen sales among new customers
Introduction
A product line is a group of multiple products marketed by a brand and sold under a single company. The main idea behind a new product is to offer multiple products to customers in order to capture their attention, with the intent being that a customer will be retained for a long time given that they like the products the company is offering. For example, a customer who constantly buys Amul Milk is more likely to trust an Amul Chocolate Bar.
Why does a company need a product line?
Offering a variety of products may be the difference between winning over customers and staying on the shelves the longest. Marketers can use different products to gain a competitive advantage over their competitors by expanding into a new market segment and expanding their overall customer base. For example, two rival smartphone businesses are competing for the same customers. One company can expand its business to smartwatches to bring in more customers who like their smartwatches and have them try out their smartphones if they like what the brand stands for. This is one of the few ways through which Product Lines and Business Growth.
How does a product line help a brand?
A product line allows a company to streamline its process, serve its customers, and, all in all, ultimately focus on business growth. The main reason behind using different products is:
- Helps meet customer needs:
Each customer has different needs when it comes to a product. For example, some customers might need natural and herbal soap, whereas some might need soap with a strong fragrance; in this scenario, Hindustan Unilever provides both Hamam and LUX to ensure customer needs are fulfilled - Superior Brand Image:
Providing a variety of products and having a large market share ensures that the brand is well respected and adored. For example, people love Coke-A-Cola as a brand since they provide the best quality and flavours when it comes to the cold-drinks market, with the likes of Thums Up, Fanta, Sprite, etc. - Improves production efficiency and lowers production cost:
According to the economies of scale, the more you produce something, the less it will cost you to make in the long run. With a variety of products under a brand’s belt, it helps the company to mitigate the per-product cost and increase the efficiency of its manufacturing process - Manage Market:
Offering various products to consumers across various price points enables the company to capture a large amount of market share. For example: Tata Motors has both an entry-level offering, the Tata Tiago, and a premium-level offering – Jaguar
How does a company determine its product line?
When a company has to decide on its assortments of products, it has to consider various factors, some of which are:
- Market Research and Customer Analysis:
A company needs to research which type of audiences they are aiming for, what customers’ needs are being missed, and try to understand the demand of the customers to make informed decisions - Research Capabilities:
A company has to understand its own resources and abilities to develop new products. Many companies overlook their abilities and expertise to handle multiple products - Strategy:
A company ultimately has to develop strategies first on how they are going to position their products and how they are going to make the new product reinforce their brand
Conclusion
Owning a single product that rivals every single competitor and is the star of every consumer’s eyes sounds like a dream, but in reality, the competition is very tough and ever-evolving. A company needs to own multiple products and try to appease different consumer demands if it wants to scale up its business.
Sumukh Telikicherla
Content writer
Anjali Gupta
Graphic designer
Kavita Valia
Content Editor