Product-line and Product-mix Strategies
Product Lines
A product line is a group of products from a single manufacturer that are similar in terms of use or characteristics. Offering additional products can help a manufacturer boost revenues and increase its visibility in retail stores. On the other hand, creating too many products and product variations can be expensive for everyone in the supply chain and can be confusing to buyers.
Product Mix
An organisation with several product lines has a product mix-a collection of diverse goods or services offered for sale. The complete portfolio of products that a company offers for sale.
Expanding a Product Line - Brand extension
Brand extension: Using the brand of existing products on products in a new category. Ie. offering a service under a brand that offers goods.
Brand Extension Strategy
Conversely, in a brand extension, a company applies a successful brand name to a new product category in the hopes that the recognition and reputation of the brand will give it a head start in the new category. Building on the name recognition of an existing brand cuts the costs and risks of introducing new products. Brand extension: Applying a successful brand name to a new product category.
Product-line and Product-mix Strategies
In addition to developing product identities, a company must continually evaluate what kinds of products it will offer.
Expanding a Product Line - Line extension
Line extension: Creating variations of an existing product.
Expanding a Product Line - Line filling
Line filling: Developing items to fill gaps in the market that have been overlooked by competitors or have emerged as consumer tastes and needs shift.
Expanding a Product Line - Line stretching
Line stretching: Adding items with price points above or below the current product line.
Product Strategies for International Markets
Managers must decide on which products and services to introduce in which countries. When selecting a country, they must take into consideration the type of government, market-entry requirements, tariffs and other trade barriers, cultural and language differences, consumer preferences, foreign-exchange rates, and differing business customs. Then, they must decide whether to standardise the product, selling it everywhere, or to customise the product to accommodate the lifestyles and habits of local target markets.
Dimensions Strategy
Some companies limit the number of product offerings and focus on selling a few items in higher quantities. Doing so can keep production and marketing costs lower through economies of scale. However, counting too heavily on a narrow set of products leaves a company vulnerable to competitive threats and market shifts. Other companies diversify their product offerings as protection against shifts in consumer tastes, economic conditions, and technology, or as a way to build marketing synergy by offering complementary products
Brand Managers
The responsibility for managing individual products, product lines, and product mixes is usually assigned to one or more managers in the marketing department. In a smaller company, the marketing manager tackles this effort; in larger companies with more products to manage, individual products or groups of products are usually assigned to brand managers, known in some companies as product managers or product-line managers.
Dimensions of a Product Mix
Three important dimensions of a product mix are width, length, and depth, and each dimension presents its own set of challenges and opportunities. A product mix is wide if it has several product lines. A product mix is long if it carries several items in its product lines. A product mix is deep if it has a number of versions of each product in a product line.
Brand Extension Risks
Two important risks that marketers need to consider carefully: First, stretching a brand to cover too many categories or types of products can dilute the brand's meaning in the minds of target customers. Second, additional products do not automatically guarantee increased sales revenue. Marketers need to make sure that new products don't simply cannibalise, or take sales away from, their existing products.
Product Expansion Strategies - Family Branding
You can expand your product line and mix in a number of ways. One approach is to introduce additional items in a given product category under the same brand name-such as new flavours, forms, colours, ingredients, or package sizes. Another approach is to expand a product line to add new and similar products with the same product name - a strategy known as family branding. Family Branding - Using a brand name on a variety of related products. Family branding is mainly used by companies with a positive brand equity. A family brand may be referred to a group of different products belonging to a single brand that are marketed under their parent brand.