Product Line

Beyond decisions about individual products and services, product strategy also calls for building a product line. A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. For example, Nike produces several lines of athletic shoes and apparel, and Marriott offers several lines of hotels.

The major product line decision involves product line length-the number of items in the product line. The line is too short if the manager can increase profits by adding items; the line is too long if the manager can increase profits by dropping items. Managers need to analyze their product lines periodically to assess each item's sales and profits and understand how each item contributes to the line's overall performance.

A company can expand its product line in two ways: by line filling or line stretching. Product line filling involves adding more items within the present range of the line. There are several reasons for product line filling: reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors. However, line filling is overdone if it results in cannibalization (eating up sales of the company's own existing products) and customer confusion. The company should ensure that new items are noticeably different from existing ones.

Product line stretching occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways. Companies located at the upper end of the market can stretch their lines downward. For example, Mercedes has stretched downward with the CLA line to draw in younger, first- time buyers. A company may stretch downward to plug a market hole that otherwise would attract a new competitor or to respond to a competitor's attack on the upper end. Or it may add low-end products because it finds faster growth taking place in the low-end segments. Companies can also stretch their product lines upward. Sometimes, companies stretch upward to add prestige to their current products or to reap higher margins. P&G did that with brands such as Cascade dishwashing detergent and Dawn dish soap by adding "Platinum" versions at higher price points. 

As they grow and expand, many company both stretch and fill their product lines. Consider BMW

Over the years, BMW Group has transformed itself from a single-brand, five-model auto- maker into a powerhouse with three brands, 14 "Series," and dozens of distinct models. The company has expanded downward with its MINI Cooper line and upward with Rolls-RoyceIts BMW line brims with models from the low end to the high end to everything in betweenBMW Altersales DMW Insights . The brand's seven "Series" lines range from the entry-level 1-Series subcompact to the luxury-compact 3-Series to the midsize 5-Series sedan to the luxurious full-size 7-Series. In between, BMW has filled the gaps with its X1, X3, X4, X5, and X6 SUVsM-Series performance models; the Z4 roadster; and the i3 and 18 hybrids. Thus, through skillful line stretching and filling, while staying within its premium positioning, BMW now has brands and lines that successfully appeal to the rich, the super-richand the hope-to-be-rich.

Examples of Product Line Extension

1. Coca-Cola

The introduction of Diet Coke and Coca-Cola Zero Sugar expanded the original Coca-Cola product line to cater to health-conscious consumers.

2. Lay’s

Lay’s offers a variety of flavors and limited-edition chips, including spicy, exotic, and local flavors to appeal to different tastes.

3. Oreo

Oreo cookies have been extended to include various flavors (like birthday cake and red velvet) and formats (such as Oreo Thins and Mega Stuf).

4. Nike

Nike has expanded its line of athletic shoes to include specialized versions for different sports, lifestyles, and even collaborations with celebrities.

5. Procter & Gamble

P&G has extended its Tide brand to include Tide Pods, Tide Free & Gentle, and other variants, addressing various laundry needs.