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Product Line

Product Line

In a market, we rarely see companies market individual products. Instead, they group similar products and market them under one big umbrella. This is known as a product line. Using product lines can help the company reduce customer acquisition costs, build brand loyalty, and improve overall sales. In this explanation, you'll delve deeper into the concept of product lines and their benefits to a business.

Product Line Definition

A product line is a group of related products marketed under the same brand. These products are often sold to the same group of customers within a given price range.

A company can have multiple product lines sold under different brand names. The total of all product lines within a company is called the product mix.

A product line is a group of related products targeting the same customers.

To understand a company's product line, we must first consider the types of products it has. For example, Coca-Cola has three main product types: sodas, Minute Maid, and mineral water. The soft drinks line has five products - Coca-Cola, Diet Coke, Coke Zero, Fanta, and Sprite. The Minute Maid product line has three products (Guava, Mango, and Mixed Fruit), and mineral water has 1 product.1

In this example, the number of Coca-Cola product lines is 3.

Companies develop product lines to maximize the profit of popular items. For example, Coca-Cola is a popular soft drink many people worldwide enjoy. To leverage the success of the original Coke, the company introduced several varieties to this product line, such as Coke Zero, Diet Coke, Vanilla Coke, etc.

Product Line Strategies

Product line strategies often involve adding or removing items from a certain product line. This allows the company to attract more buyers or enter a new market. There are three main product line strategies.

Product Line Length

Product line length refers to all products in the same product line. Long product line length can expand the market segment, while shorter product length can increase the company's profit. But companies can also increase profit by lengthening the product line.

There are two strategies to decrease or increase the product line:

Line Expansion

Line expansion means adding new products to the product line. It includes two strategies: product line filling and product line stretching.

  • Product line filling means widening the product length by filling the gap. For example, a cosmetics brand comes up with a range of products - lipstick, lip balm, lotion, and cream to meet every need of the target customer.

  • Product line stretching means expanding the product length by:

    • Stretching up - adding new products at higher prices to the existing product line.

    • Stretching down - adding new products at lower prices to the existing product line.

    • Stretching both ways - adding both products of higher and lower prices to the product line.

Line contraction

The opposite of line expansion is line contraction. When targeting a new market, companies may have to abandon certain products that do not meet the market demand. This is called line contraction. Line contraction frees up space for companies to produce new products that better match customer needs. It also increases the firm's competitiveness and control of the market.

Product line modification

To keep up with competition, companies must constantly update and renew their products. This process is known as product line modification. Product line modification may require a lot of researching and analyzing market needs.

Colgate is a company that keeps updating its toothpaste formula to improve customer experience. For example, Colgate Renewal is the latest product version that helps protect your teeth whilst simultaneously being vegan, sugar-free, and gluten-free.2

Product Line Featuring

This strategy refers to adding products of different price ranges to the same product line to attract different groups of customers.

Types of Product Line

Along with product line strategies, there are five types of product lines that companies can add to their portfolio:

  • New to the world - this is the brand new product line introduced to the market after careful research & development. New-to-world products come with many risks but are also very rewarding. If successful, it can lead to multiple products and varieties added to the original product line. For example, after the success of the first iPhone in 2007, Apple released 33 more iPhone models over the past 15 years. They have all been doing well on the market, reaching over 1 billion people.3

  • New product lines - these are products added to production but not exactly new to the world. The companies that develop these products have already established a loyal customer base and develop new products to compete with competitors in the market. For example, Apple launched the Apple TV streaming service in 2019 to compete with companies like Netflix or Disney Plus.

  • Product line extensions - These are new additions that fit into the company's existing product line. For example, Coca-Cola launches many varieties of Coke in addition to its classic Coke.

  • Product improvements - These are updates that improve the quality and value of existing products. An example of this is mobile app updates. The improvements can be subtle such as Colgate improving their toothpaste formula over time or replacing the existing product completely.

  • Repositioning - sometimes, companies can introduce a new application for an existing product to reach a new market segment. This is known as repositioning. For example, Nokia used to focus on marketing cell phones (a B2C business model). After the drastic failure against smartphones, the company has switched its focus on B2B service of data networking and telecommunications.4

Product Line Pricing

Product line pricing means offering different versions of products or services at different price points depending on customer preferences and perceptions. It comes with two main benefits. First, differential prices allow companies to extend their reach. For example, a bakery has a low-priced drink or dessert to attract more people to the store while selling higher-value products. Second, companies can target customers of different levels, including high-income, middle-income, and low-income.

There are four main product line pricing strategies:

  • Bundle pricing involves packaging several items as one and selling them at a single price. For example, a hotel service includes accommodation, pick-up at the airport, and free breakfast.

  • Leader pricing puts products at a discount to attract people to the store.

  • Bait pricing is another strategy to drive customers to the store or website by offering a huge sale on a limited item.

  • Captive pricing takes advantage of a popular product to sell more products in that category. For example, a product can be a loss leader (sold at a very low price) to bring more customers to the business. We often see this in SaaS products where the company offers a free subscription to the service. The option only consists of a few features to demonstrate to customers what the product can do.

Product Line Example

There are many product line examples in real life. Let's look at the Body Shop, a company specializing in beauty and skincare products.

The Body Shop has a vast product mix with seven main product lines:

  • Bath and Body

  • Skincare

  • Makeup

  • Hair

  • Fragrance

  • Men's

  • Accessories

Each of these product lines is made up of different products. For example:

  • The hair product line has four products: shampoo, conditioner, hair styling products, brushes, and combs.

  • The 'bath and body' product line has six products: body cleanser, body moisturizer, body scrub, fragrances, lips, and spa & treatment.

Each product category is made up of different varieties. For example, in the 'bath and body' line, the body moisturizer consists of body lotion and body butter with different scents such as strawberry, cocoa, olive, British rose, etc.5

Here are more examples of major brands with multiple product lines:

  • Nike's product lines include footwear, clothing, and equipment.

  • Starbucks' product lines include coffee, tea, food, and merchandise.

  • Apple's product lines include Macbooks, iPhones, iPads, Apple TV, music streaming services, desktop computers, and software.

Product Line vs Product Mix

Both product line and product mix comprise products in the company's portfolio. However, the product mix is much broader than the product line. It is the total of all product lines within a portfolio.

The product mix of Pepsi is made up of different product lines: the energy drink product line with 7UP, Pepsi, Marinda, Mountain Dew, and the food product line with Quaker Oat, for instance.


Product LineProduct Mix
DefinitionA group of closely related products sold under a brand. Refers to all products sold by the company.
Factors influencingPrice range, target audience, product functions.Company's age, financial position, reputation.

Table 1. Product Line vs Product Mix. Source: Indeed.6

Companies with a vast product mix can cross-sell between product lines. Cross-selling means selling related products to customers purchasing another product.

Product Dimensions

The product mix is the product portfolio of a company. It consists of 4 dimensions - length, width, depth, and consistency. Here's a breakdown of each dimension:

  • Length- is calculated as the number of product lines multiplied by the number of products in each line. Suppose a company has 5 product lines and three products in each product line. Its product line length will be 5 x 3 = 15.
  • Width - is the number of product lines that a company has. In the above example, the company's product line width is 5.
  • Depth - is the number of products in each product line. Suppose a company has 5 product lines and three products in each line, then product depth is 3.
  • Consistency - measures the degree of variation between products in a product line. For example, Samsung has a low product line consistency because it sells a wide range of products - home appliances, air conditioners, TV, smartphones, etc. The Body Shop has more consistent product lines as their products are all related to beauty and care - haircare, facial care, shower gel, etc.

Product Line - Key takeaways

  • A product line is a group of related products targeting the same customers.

  • There are three main product line strategies: Product line length, Product line modification, and Product line featuring.

  • Product line length strategy means adding new products to the existing product lines. It includes two strategies: line expansion and line contraction.

  • There are five product line types: New to the world, New product line, Product line extension, Product improvements, and Repositioning.

  • Product line pricing means offering different versions of products or services at different price points.

  • The product line is a subset of the product mix. The total number of product lines within a company is called product mix.


References

  1. Hitesh Bhasin, How to analyse the product mix of any brand? With example of coca cola, Marketing 91, 2018.
  2. Colgate Renewal, https://www.colgate.com/en-us/renewal.
  3. Conner Carey, The History of Every iPhone Model from 2007–2022, https://www.iphonelife.com/content/evolution-iphone-every-model-2007-2016, 2022.
  4. Nokia, https://en.wikipedia.org/wiki/Nokia.
  5. Pragya Mehta, Merchandise mix of bodyshop, https://www.slideshare.net/pragyamehta2/merchandise-mix-of-bodyshop, 2017.
  6. Product Line vs. Product Mix: Key Differences, https://www.indeed.com/career-advice/career-development/product-line-vs-product-mix.

Frequently Asked Questions about Product Line

Product line is a group of related products sold under the same brand to the certain group of customers. The total of product lines make up the product mix. A product mix a company's product portfolio.

The Body Shop has 7 product lines: Bath and body, Skincare, Makeup, Hair, Fragrance, Men, and Accessories. Within each if these products are different product groups and varieties. 

Product line analysis is part of product line development. It involves identifying opportunities and creating a set of related products to deliver the most customer value.

While both product line and product mix includes the company's products, product line is a smaller than product mix. It is a subset of product mix. 

There are five types of product lines: new to the world, new product line, product line extension, product improvements, and re-positioning.   

Final Product Line Quiz

Question

____________ is a group of related products marketed under the same brand.

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Answer

Product line

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Question

A company can have _______ product line(s) sold under different brand names.

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Answer

only one

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Question

Product line length refers to __________.

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Answer

all products in the same product line.

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Question

Product line filling and Product line stretching are strategies of line contraction.

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Answer

True

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Question

What describes stretching up strategy in product life extension?

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Answer

adding new products of higher prices to the existing product line.

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Companies cannot remove products from product lines.

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True

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Question

New to the world are ___________.

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Answer

Brand new products launched in the market

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Re-positioning means ________ for an existing product to reach a new market segment. 

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Answer

introducing a new application

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Question

What are the primary product line strategies?

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Product line length, Product line modification, and Product line featuring.

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Product mix refers to all products sold by the company. 

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True

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How many dimensions does product mix has?

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Answer

3

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Width of mix is ____________.

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the number of product lines that a company has

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Depth of product mix is the number of products in each product line. 

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True

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Question

Which product line pricing takes advantage of a popular product to sell more products in that category?

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Answer

Captive pricing

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Question

Product line pricing means offering different versions of product or service ____________ depending on customer preferences and perceptions. 

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Answer

at different price points

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Question

To keep up with competition, companies have to release modified and renewed products. This refers to what product line type?

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Answer

Product improvements

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Question

Companies with a low product line consistency sell products that differ widely from each other, e.g. TV, smartphones, home applications.

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Answer

True

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