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Generate summaryIf you've ever looked closely at a product's fine print and seen a company name different from the brand listed, you've seen a product line in action. It can be confusing when a name you identified with a company turns out to be a subsidiary brand, but there are several strategic reasons for doing so.
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A product line is a unified category of closely related products sold by one company. It allows companies to sell certain products under separate brand names, even if the products use the same company resources.
However, the exact product line definition doesn't hinge on the brand name alone, as different product lines can be sold under the same brand. The key factor is that the products must be of a consistent type according to clearly defined and unifying qualities.
The purposes of a product line include:
Some common examples of product lines include:
Sometimes, different product lines are more similar than dissimilar in some fundamental way. For instance, iPhones and MacBooks are part of different product lines, but they're also highly compatible with each other.
A product mix is a collection of multiple product lines—the company's entire portfolio of separate product lines. Think of a product line as akin to a real estate company's properties within a particular state and the product mix as that same company's total properties nationwide (or even globally). Similarly, a company serving markets of any number and size can operate various product lines.
At a minimum, starting a product line requires two important considerations:
Once these two variables are established, you can then create different buyer personas for your product line for design and marketing purposes.
A product-market fit is one efficient way to find the ideal customer while conducting market research and competitor analysis. This process will also help with product line pricing, where you need to know how much your audience is willing to spend on similar brands.
Depth refers to the number of different products featured in a product line. It also relates to the variation of products within a product line. Essentially, product line depth boils down to:
To increase product line depth, companies engage in product line extension, which is a fancy way of saying that you want to add new products. It can be confusing because a new product line extension can be very different from other products in that same product line, even if they fulfill the same market niche.
An example would be if a sporting goods company branched out into sports drinks or energy bars. They still want to use the same brand as their athletic gear, as they're appealing to the same market. Another example is when a bank, auto mechanic, or hotel makes pens with their name and logo. They're only extending their product line for promotional products—they aren't striking out into the pen industry.
Product line expansions generally come in two forms:
Product lines allow companies the opportunity to control revenue and market behavior by strategically pricing each product line. In some cases, companies rush less-than-unique product lines to market to sell at different price points.
Some of the most common product line pricing methods include:
1. Loss-leaders (aka "captive pricing")
Sometimes a company knows a product won't exactly bring home the bacon—but they have the inventory to burn and decide to take a sustainable loss by selling it under value. Why? Because giving customers a great deal dramatically boosts visibility for other products that do turn a good profit.
If the loss-leader product is in short supply, this becomes a form of "bait pricing," where the promotional product gets traffic in the door, even long after it's sold out. Be careful not to run afoul of false advertising laws or sour your customer base.
2. Price bundling
Another option for underperforming products is bundling them with other, more attractive products. The goal is to sweeten the deal (even if the cherry isn't that ripe). Of course, you could always bundle more obviously great products together, then raise the bundled price accordingly.
3. Luxury products or add-ons
Creating a deluxe version of an old classic can easily boost sales with or without much creative effort. It can be as simple as offering lifetime storage for a cloud-based SaaS. Luxury trim packages for cars are another major type of luxury product.
4. Value products
On the other side of the coin, many shoppers look at price tags first and products second. To appeal to these shoppers, make it easy by creating a whole product line founded on more affordable versions.
Price lining is a bit of a niche tactic, where a product line is set at the same price or within a tight price range. The goal is to simplify the shopper's experience so much that they start making purchases based on impulse, seeing an opportunity to receive more than what they first expected.
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